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1. The following transactions relate to IBM Corporation. Indicate whether or not each transaction immediately gives rise to an asset for IBM. If IBM records an asset, state the account title, the amount, and whether the asset is current or noncurrent. IBM invests $8,000,000 in Intel stock that it intends to hold for six months. IBM sends a check for $600,000 to a landlord for two months rent in advance on warehouse facilities. The rental period begins next month. IBM signs a four-year employment agreement with its president for $30,000,000 per year. The contract period begins next month. IBM purchases a patent on a laser printer from its creator for $8,500,000. IBM received memory chips from Intel billed at $12,000,000 with payment due in 30 days.

2. The following transactions relate to the New York Yankees. Indicate whether or not each transaction immediately gives rise to a liability for the Yankees. If the Yankees record a liability, state the account title, the amount, and whether the liability is current or noncurrent.

The Yankees sign a 5-year contract with Joe Baseball for $7,400,000 per year. The contract period starts on February 1 of next year.

The Yankees receive $2,700,000 from sales of season tickets for the baseball season starting in 2 months (the baseball season is 6 months long).

The Yankees issue bonds for $8,000,000. These bonds are due in 20 years and bear interest of 8% per year.

The Yankees receive a bill for utilities used last month in the amount of $3,400 (the bill is not paid immediately).

The Yankees receive new uniforms for the team with an invoice of $100,000. Payment for the uniforms is due in 30 days.

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