Reference no: EM132643182
Problem 1: Which of these items related to bonds would be added back in the Operating section of the SCF under the indirect method? (check all that apply)
Option 1: Loss on bond retirement
Option 2: Amortization of bond discount
Option 3: Gain on bond retirement
Option 4: Amortization of bond premium
Option 5: Unrealized loss on bonds under the fair value option
Problem 2: Which of these contractual terms would lead a company to account for a lease contract under the capital lease method? (check all that apply)
Option 1: None of these
Option 2: The lessee can buy the truck at its current market value at the end of the lease
Option 3: The present value of the lease payments is $89,000. The truck could be bought today for $100,000 cash.
Option 4: The lease runs for 2 years on a truck that is expected to have a 6 year life
Option 5: Ownership stays with the lessor at the end of the lease
Option 6: The IRS requires capital lease method for tax purposes for this contract