As an inducement to enter a lease, Owl Co., a lessor, granted Fox, Inc., a lessee, twelve months of free rent under a four-year operating lease. The lease, effective on January 1, 2018, provides for monthly rental payments to begin January 1, 2019. Fox made the first rental payment on December 30, 2018. In its 2018 income statement, what rental revenue should Owl report?

One-fourth of the total cash to be received over the life of the lease.

One-third of the total cash to be received over the life of the lease.

Zero.

Cash received during 2016.

Owl Co. has 300,000 common shares, 60,000 common stock options, and 15,000 shares of $100, 4% cumulative preferred stock, all of which were outstanding during 2018. The stock options exercise price is $30 and the average market price is $40 during 2018. Also, Owl has net income of $600,000 and declared no dividends in 2018. What is Basic & Diluted EPS?

Basic EPS $1.80 & Diluted EPS $1.90

Basic EPS $1.80 & Diluted EPS $1.71

Basic EPS $2.00 & Diluted EPS $1.71

Basic EPS $2.00 & Diluted EPS $1.67