5 3 pts Netflix signs a contract with NBC granting Netflix the right to stream The Office. The contract states that Netflix is entitled to stream all prior episodes and all future episodes of The Office released over the next five years. At the time the contract is signed, NBC has already released 100 episodes of The Office and will release an additional 50 episodes of The Office over the next two years. The contract requires Netflix to pay $300 million to NBC in five equal payments over a five-year period. Netflix should: Expense the full $300 million on the income statement on the date the contract is signed. Record each payment as an asset and a liability only after the payment is made to NBC. Recognize neither an asset nor a liability for this contract. O Record the $300 million as both an asset and a liability when the contract is signed. Question 6 3 pts Netflix signs a contract with Disney entitling Netflix the right to stream the movie Frozen. The contract requires Netflix to pay three payments to Disney of $33 million at the end of the next three years. On the day the contract is signed, Disney transfers the Frozen source file to Netflix, thus immediately allowing Netflix to begin streaming Frozen. Netflix should record the value of this contract as an asset and a liability. True False Question 7 3 pts Any time a company signs a contract requiring that company to pay another entity, the total value of these payments will always appear in some form on the balance sheet of the company making the payments. True O False Question 8 Back when Netflix primarily rented out DVDs, Netflix would: 3 pts O purchase DVDs, capitalize the total value of the DVDS on its balance sheet, and reassess the value of the DVDS every few years. O purchase DVDs and depreciate the DVDs on its income statement over several years. O purchase DVDs and expense the DVDs over several years in a process called amortization. O purchase DVDs and immediately expense the total value of those DVDs on its income statement