A Company Sells a Building to a Bank in 2013

question 28

Multiple Choice

A company sells a building to a bank in 2013 at a gain of $100,000 and immediately leases the building back for period of five years. The lease is accounted for as an operating lease. The building was originally purchased for $200,000 and currently had a book value of $50,000 at the date of the sale.
What amount should be recognized in 2013 as a gain on the sale using U.S. GAAP?

• A) $20,000.
• B) $50,000.
• C) $100,000.
• D) $150,000.
• E) $200,000.

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