Speak Corporation,a Calendar Year Accrual Basis Taxpayer,sells Packages of Foreign

question 86

Multiple Choice

Speak Corporation,a calendar year accrual basis taxpayer,sells packages of foreign language lessons to individuals planning to work overseas. In December,2014,it sold and received payment for $600,000 of 24-month lesson packages to be provided evenly through 2015 and 2016. Speak Corporation will recognize the $600,000 of income

• A)all in 2014.
• B)half in 2015 and half in 2016.
• C)all in 2015.
• D)all in 2016.

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Definitions:

Yankee Bonds

Bonds issued in the United States by foreign governments or corporations and denominated in U.S. dollars.

Bulldog Bonds

Bonds issued in the United Kingdom by foreign entities in sterling, allowing those entities to raise capital from UK investors.

Coupon Bond

A debt security that pays interest to its holder through coupons at designated times until it matures, when the principal amount is repaid.

Par Value

The face value of a bond or a stock's stated value, as set forth in the corporate charter.