Which of the following is not a condition requiring the use of the capital lease reporting...
Which of the following is not a condition requiring the use of the capital lease reporting method?
Select one:
A. The lease automatically transfers ownership of the leased asset from the lessor to the lessee at the termination of the lease.
B. The lease provides that the lessee can purchase the leased asset for a nominal amount (bargain purchase price) at the termination of the lease.
C. The lease term is at least 75% of the remaining estimated economic useful life of the leased asset.
D. The lease allows the lessee to use the leased asset during the lease term.
Homework Answers
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Which of the following is not a condition requiring the
use of the capital lease reporting...
Which of the following lease criteria would not qualify a lease as a capital lease? Multiple...
Which of the following lease criteria would not qualify a lease as a capital lease? Multiple Choice The lease term is equal to or greater than 75% of the estimated economic life of the leased property. The lease transfers ownership of the property to the lessee by the end of the lease term. The present value of the minimum lease payments equals or exceeds 90% of the fair value of the leased property. The lease contains an option to purchase...
Under U.S. GAAP, which of the following items would require a lessee to classify a lease of equipment as a capital lease...
Under U.S. GAAP, which of the following items would require a lessee to classify a lease of equipment as a capital lease? a. The lease term is 90% of the estimated economic life of the lease property. b. The lease does not contain a bargain purchase option. c. The present value of the contractual minimum lease payments is 75% of the fair value of the leased property. d. There is no transfer of ownership to the lessee at the end...
Which of the following is not a sufficient criterion for a lessor to classify a lease...
Which of the following is not a sufficient criterion for a lessor to classify a lease as a sales-type lease? Multiple Choice The lease transfers Ownership of the leased asset to the lessee at the end of the lease term. O The lessee has the option of acquiring the asset during or at the end of the lease term at a bargain price. O The present value of the lease payments is greater than the carrying value of the leased...
A lessee with a finance lease containing a bargain purchase option should depreciate the leased asset...
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Lessor Sales Company and Lessee Manufacturing Company agreed to a noncancelable lease. The follow...
Lessor Sales Company and Lessee Manufacturing Company agreed to a noncancelable lease. The following in- formation is available to both entities regarding the lease terms and the leased asset. I. Lessor's cost of the leased asset was $30,000. The asset was new at the inception of the lease term. 2. Lease term is three years starting January 1,2020 3. Estimated useful life of the leased asset is six years. Estimated residual value at end of six years is zero. 4....
Problem 4: Assume the same facts as for Problem 3. A. For the lessor, is the lease a finance lease (sales-type) or...
Problem 4: Assume the same facts as for Problem 3. A. For the lessor, is the lease a finance lease (sales-type) or an operating lease? Explain why or why not. B. Prepare the lessor's journal entries through 12/31/Yr1. Problem 3: The following facts pertain to a non-cancelable lease agreement between Lessee and Lessor: Date of the Lease 12/31/YO Annual lease payment (Payment 1 due immediately) $20,472 Bargain Purchase Option (Lessee expects to exercise) $4,000 Lease Term 5 years Economic Life...
Executory costs include a) maintenance, interest and property taxes. b) interest, property taxes and depreciation. c)...
Executory costs include a) maintenance, interest and property taxes. b) interest, property taxes and depreciation. c) insurance, maintenance and property taxes. d) maintenance, insurance and income taxes. Which of the following is a correct statement regarding one of the ASPE capitalization criteria? a) The lease transfers ownership of the property to the lessor. b) The lease must contain a bargain purchase option. c) The lease term is 75% or more of the leased property’s estimated economic life. d) The fair...
On January 1, 2021, SantanaBrewing, a lessee, entered into three non-cancelable leases for new equipment, Lease O, Lease M, and Lease G. None of the three leases transfers ownership of the equipment to Santana Brewing at the end of the lease term. The f
On January 1, 2021, SantanaBrewing, a lessee, entered into three non-cancelable leases for new equipment, Lease O, Lease M, and Lease G. None of the three leases transfers ownership of the equipment to Santana Brewing at the end of the lease term. The following information is specific to each lease. Lease O does not contain a bargain purchase option. Lease M contains a bargain purchase option. The lease term is equal to 50% of the estimated economic life of the...
Problem 3: The following facts pertain to a non-cancelable lease agreement between Lessee and Lessor: Date...
Problem 3: The following facts pertain to a non-cancelable lease agreement between Lessee and Lessor: Date of the lease 12/31/YO Annual lease payment Payment 1 due immediately) $20,472 Bargain Purchase Option (lessee expects to exercise) $4,000 Lease Term 5 years Economic Life of Leased Asset 10 years Lessor's Cost of the asset $65,000 Fair Value of the asset $91.000 Lessor's Implicit Rate & Lessee's Incremental Borrowing Rate The collectability of the lease payments by Lessor is probable. A. For the...
25. Which of the following is a one of the criteria for recording a lease as...
25. Which of the following is a one of the criteria for recording a lease as a finance lease, under IFRS? A) B) C) D) The lease term is for the major part of the economic life of the asset. The lease must be cancelable. The lease doesn't contain a bargain-purchase option. The present value of the minimum, lease payments amounts to 75% of the fair value of the leased asset.
Which of the following is not a sufficient criterion for a lessor to classify a lease as a sales-type lease? Multiple Choice The lease transfers Ownership of the leased asset to the lessee at the end of the lease term. O The lessee has the option of acquiring the asset during or at the end of the lease term at a bargain price. O The present value of the lease payments is greater than the carrying value of the leased...
Lessor Sales Company and Lessee Manufacturing Company agreed to a noncancelable lease. The following in- formation is available to both entities regarding the lease terms and the leased asset. I. Lessor's cost of the leased asset was $30,000. The asset was new at the inception of the lease term. 2. Lease term is three years starting January 1,2020 3. Estimated useful life of the leased asset is six years. Estimated residual value at end of six years is zero. 4....
Problem 4: Assume the same facts as for Problem 3. A. For the lessor, is the lease a finance lease (sales-type) or an operating lease? Explain why or why not. B. Prepare the lessor's journal entries through 12/31/Yr1. Problem 3: The following facts pertain to a non-cancelable lease agreement between Lessee and Lessor: Date of the Lease 12/31/YO Annual lease payment (Payment 1 due immediately) $20,472 Bargain Purchase Option (Lessee expects to exercise) $4,000 Lease Term 5 years Economic Life...
Problem 3: The following facts pertain to a non-cancelable lease agreement between Lessee and Lessor: Date of the lease 12/31/YO Annual lease payment Payment 1 due immediately) $20,472 Bargain Purchase Option (lessee expects to exercise) $4,000 Lease Term 5 years Economic Life of Leased Asset 10 years Lessor's Cost of the asset $65,000 Fair Value of the asset $91.000 Lessor's Implicit Rate & Lessee's Incremental Borrowing Rate The collectability of the lease payments by Lessor is probable. A. For the...
25. Which of the following is a one of the criteria for recording a lease as a finance lease, under IFRS? A) B) C) D) The lease term is for the major part of the economic life of the asset. The lease must be cancelable. The lease doesn't contain a bargain-purchase option. The present value of the minimum, lease payments amounts to 75% of the fair value of the leased asset.
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