For a Sale-Leaseback Transaction for Which the Lease Qualifies as a Capital

Multiple Choice

For a sale-leaseback transaction for which the lease qualifies as a capital lease, the seller-lessee should account for any gain on the sale of the asset as

A) a gain to be recognized immediately
B) a gain to be deferred and amortized in proportion to the lease payments over the lease term
C) a gain to be deferred and amortized in proportion to the amortization of the leased asset
D) a gain to be recorded directly as an increase to Retained Earnings