On December 31, 2017, Lane, Inc., sold equipment to Nolte and simultaneously leased it back for 12
Question:
On December 31, 2017, Lane, Inc., sold equipment to Nolte and simultaneously leased it back for 12 years. Pertinent information at this date is as follows:
Sales price....................................................................$480,000
Carrying amount............................................................$360,000
Estimated remaining economic life........................................15 years
Required:
1. Under ASC 840, at December 31, 2017, should Lane report a gain from the sale of the equipment?
2. If not, how should it account for the sale and leaseback?
3. Explain how your answers to requirements 1 and 2 would change under ASC 842.
Step by Step Answer:
Requirement 1 Deferred gain under ASC 840 Sales price 480000 Carrying amount 360000 Deferred gain on ...View the full answer
Financial Reporting and Analysis
ISBN: 978-1259722653
7th edition
Authors: Lawrence Revsine, Daniel Collins, Bruce Johnson, Fred Mittelstaedt, Leonard Soffer
