On January 1, 2022 Caldwell-Pope Corporation sells a building to Wagner, Inc. for $500,000. At the time of the sale, the building had a book value of $440,000 and 30 years of useful life remaining. 

Immediately after the sale, Caldwell-Pope and Wagner agree to a 20 year lease, and Caldwell-Pope continues to occupy the building. The lease contains a bargain purchase option. The first annual lease payment is made on January 1, 2022. 

Caldwell-Pope will 

• report interest expense on its 2022 income statement. 
• report a right of use asset on its December 31, 2022 balance sheet. 
• report lease expense on its 2022 income statement. 
• report a gain on sale of land on its 2022 income statement.

Answer rating: 100% (QA)

Solution The correct answer is report a right of use asset on its Decem... View the full answer