How does one account for a transaction where the "buyer" makes a down payment or deposit to the "seller"  and retainsan the option to purchase the property and business within a spefied seriod while making " monthly option payments" 

Option 1 record as a Purchase and put  the assets on the books and the unpaid portion as a "Sellet Fiananced..

if option is abandoned..???

Option 2  treat it as a rental UNTIL the purchase is  consummated, crediting as income the payments so far deducted as  as rent? or as a reduction of purchase price....??

Never had to face this before ..I searched teh AICPA fo rguuidance and was not suceesful

Any help will be appreciated may be there is a very somple direct answer???