When a Sale and Leaseback Occurs

Multiple Choice

When a sale and leaseback occurs

A) A gain or loss on the sale of the leased asset is deferred and amortized over the lease term .
B) A gain on sale of the leased asset is deferred and amortized over the lease term.
C) Whether a gain or loss on sale of the leased asset is deferred and amortized over the lease term depends on whether the lease is classified as a capital lease or an operating lease.
D) Both gains and losses are recognized in earnings when the asset is sold.