Turner, a successful executive, is negotiating a compensation plan with his potential employer. the employer has offered to pay turner a $600,000 annual salary, payable at the rate of $50,000 per month. turner counteroffers to receive a monthly salary of $40,000 ($480,000 annually) and a $180,000 bonus in 5 years when turner will be age 65.
a. if the employer accepts turner's counteroffer, turner will recognize $660,000 at the time the offer is accepted. b. if the employer accepts turner's counteroffer, turner will recognize as gross income $55,000 per month [($480,000 + $180,000)/12].c. if the employer accepts turner's counteroffer, turner will recognize $40,000 income each month for the year and $180,000 in year 5.d. if the employer accepts turner's counteroffer, turner must recognize imputed interest income on the $180,000 to be received in 5 years. e. none of these.