Fields Company sells a building to Victory Finance Company.The selling price of the building is $500,000, which approximates its fair value, and the carrying amount is $400,000.Fields then leases the building back from Victory under an operating lease for a period of three years.How should Fields account for the gain or loss on sale-and-leaseback?

Because this is a finance lease and there is no indication of impairment, Fields would defer the gain of $100,000 ($500,000 selling price - $400,000 carrying amount) and amortize it over the term of the lease at the rate of $5,000 per year ($100,000 / 3 years).

Because the leaseback is an operating lease and the sales price of $500,000 is greater than the fair value of $470,000, $30,000 would be deferred and amortized at the rate of $10,000 per year ($30,000 / 3 years) over the three-year term of the lease.The remaining gain of $70,000 ($470,000 fair value - $400,000 carrying amount) would be recognized immediately in net income.

Because the leaseback is an operating lease and the sales price approximates fair value, Fields would record a sale and recognize a gain of $100,000 ($500,000 selling price - $400,000 carrying amount).

None of the above