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Basic Question 12 of 15
On December 31, 2014, Rosen Corp. sold a machine to Carter and simultaneously leased it back for one year. Pertinent information (on this date) follows:
Carrying amount: $330,000
Present value of reasonable lease rentals ($3,000 for 12 months @ 12%): $34,000
Estimated remaining useful life: 12 years
B. $30,000
C. $0
Sales price: $360,000
Carrying amount: $330,000
Present value of reasonable lease rentals ($3,000 for 12 months @ 12%): $34,000
Estimated remaining useful life: 12 years
In Rosen's December 31, 2014 balance sheet, the profit from the sale of this machine should be ______.
A. $34,000
B. $30,000
C. $0
User Contributed Comments 3
| User | Comment |
|---|---|
| endlessyy | Then what is that $4000 is? unearned interest? |
| Jurrens | it only asks about the sale, not the leasing-back aspect |
| jrojasut09 | the PV of the lease payments become a liability |
I am using your study notes and I know of at least 5 other friends of mine who used it and passed the exam last Dec. Keep up your great work!
Barnes
Learning Outcome Statements
explain the financial reporting of leases from the perspectives of lessors and lessees
CFA® 2025 Level I Curriculum, Volume 2, Module 8.