Lillian Properties leased a building to Hopping Industries for a ten year term a

Question

Lillian Properties leased a building to Hopping Industries for a ten year term at an annual rental of $250,000. The lease began January 1, 2013, at which time Lillian received $1,000,000 covering the first two years' rent of $500,000 and a security deposit of $500,000. The deposit will not be returned to Hopping 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 $1,000,000 should be shown as current and long-term liabilities, respectively, in Lillian's December 31, 2013 balance sheet? (Answers shown with Current Liabilities listed first, Long-term Liabilities listed second. ) $500,000 $500,000 $250,000 $500,000 $500,000 $250,000 $ -0- $1,000,000

Explanation / Answer

Answer. $250,000 & $500,000 Current Liabilities Rent Recd in Advance (500000 - 250,000)          250,000 Lon-Term Liabilities Security Deposit          500,000

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