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on 1jan 20X5 blocks co entered in to new lease agreements as follows
agreement 3 : this sale and lease back relates to a cutting machine purchased by blocks co several years ago , whose carrying amount on 31st dec 20X4 was $250000 . on january 20X5 , it was sold to cogs co for $500000 and blocks co will lease the machine back for 5 years , present value of minimum lease payments is $350000 for agreement what should be the profit recognized for the year ended 31st dec 20X5 as a result of sale and lease back
A $100000 B $250000 C $75000 D $ 150000
my ans c bcs DR cash $500000
DR right to use $175000
CR asset 250000
CR lease payment 350000
CR gain 75000
Sir but ans says option B
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