On January 4, 2007, Gregg Co

Short Answer

On January 4, 2007, Gregg Co.leased a building to Cole Corp.for a ten-year term at an annual rental of $75,000.At inception of the lease, Gregg received $300,000 covering the first two years' rent of $150,000 and a security deposit of $150,000.This deposit will not be returned to Cole upon expiration of the lease but will be applied to payment of rent for the last two years of the lease.What portion of the $300,000 should be shown as a current and long-term liability in Gregg's December 31, 2007 balance sheet? $\begin{array}{lcc} & \text { Current Liability } & \text { Lonq-term Liability } \\\text { a. } & \$ 0 & \$ 300,000 \\\text { b. } & \$ 75,000 & \$ 150,000 \\\text { c. } & \$ 150,000 & \$ 150,000 \\\text { d. } & \$ 150,000 & \$ 75,000\end{array}$