record/reflect this transaction in its Financial Statements and/or Notes to the Financial Statements

You work for a large publicly traded company, ARGO CORP, and are called into the CEO’s office on Friday afternoon to discuss an important accounting issue/transaction. As the CEO has not spent much time researching accounting standards, he has decided to put you in charge of determining the appropriate course of action for the company. Using the accounting issue/transaction information provided in Appendix A, you will be expected to explain how the company should record/reflect this transaction in its Financial Statements and/or Notes to the Financial Statements (in the form of a memo to the CEO). To provide a thorough response, you are expected to rely heavily on the Accounting Standards Codification. The CEO is expecting you to put forth a detailed response that includes 1) your assessment of the proper accounting treatment and 2) the Accounting Standards Codification (ASC) references supporting your assessment of the proper accounting treatment.