Question
In: Accounting
When an OPERATING LEASE with a contract term of more than 1 year under the Legacy...
When an OPERATING LEASE with a contract term of more than 1 year under the Legacy Lease Accounting rules is evaluated by a Lessee for classification under the NEW LEASE ACCOUNTING RULES what classification might occur? Place an X next to your answer.
OPERATING LEASE only (that is, its label stays the same always) FINANCE LEASE only (this was the whole idea for the new rules)
POSSSIBLY EITHER FINANCE or OPERATIING Lease – it depends on how the lease contract terms are evaluated under the new Lease Classification Tests.
What kind of company has been granted a regulatory extension to continue using the Legacy Accounting rules for a time yet? You can please an X next to your answer. PUBLIC COMPANIES THAT FILE WITH THE SEC
PRIVATE COMPANIES (they typically do NOT file with the SEC)
Solutions
ekkarill92 answered 2 years agoRelated Solutions
1-An asset leased under an operating lease will appear on the balance sheet as a long-term...
1-An asset leased under an operating lease will appear on the
balance sheet as a long-term asset.
True
False
2-A tangible asset is one that lacks physical existence.
True
False
3-The units-of-activity depreciation method provides a good
match of expenses against revenue.
True
False
4-A machine with a cost of $180,000 has an estimated residual
value of $18,000 and an estimated life of 3 years or 18,000 hours.
It is to be depreciated by the units-of-activity method. What is
the...
1. Describe the respective obligations of the parties under a contract for the sale or lease...
1. Describe
the respective obligations of the
parties under a contract for the sale or lease of
goods?
2.
Explain the perfect
tender rule and the exceptions to this rule that apply to sales and
lease
contracts.
3. Explain
the options
that are available to the nonbreachingparty when the other party to a
sales
or lease contract
repudiates the contract prior to the time for performanc.
4. Describe
the remedies
that are available to a seller or lessorwhen the buyer...
On 1 January 2017 Kuntan Ltd entered into an operating lease contract for premises in the...
On 1 January 2017 Kuntan Ltd entered into an operating lease
contract for premises in the
Windhoek Weinhill Mall. The lease is to run for a period of 4 years
(contract expires on 31
December 2020). As a result of several factors , the board of
directors decided on 31 December
2018 to move the entity to Merua Mall with effect from 2 January
2019. However the lease contract
determines the following:
Operating lease payments per year (no escalation) N$10...
On January 1, 2018, Winn Heat Transfer leased office space under a three year operating lease...
On January 1, 2018, Winn Heat Transfer leased office space under
a three year operating lease agreement. The arrangement specified
three annual rent payments of $102,000 each, beginning December 31,
2018, and at each December 31 through 2020. The lessor, HVAC
Leasing calculates lease payments based on an annual interest rate
of 8%. Winn also paid a $276,000 advance payment at the beginning
of the lease in addition to the first $102,000 rent payment. With
permission of the owner, Winn...
On January 1, 2018, Winn Heat Transfer leased office space under a three year operating lease...
On January 1, 2018, Winn Heat Transfer leased office space under
a three year operating lease agreement. The arrangement specified
three annual rent payments of $75,000 each, beginning December 31,
2018, and at each December 31 through 2020. The lessor, HVAC
Leasing calculates lease payments based on an annual interest rate
of 7%. Winn also paid a $330,000 advance payment at the beginning
of the lease in addition to the first $75,000 rent payment. With
permission of the owner, Winn...
On January 1, 2018, Winn Heat Transfer leased office space under a three year operating lease...
On January 1, 2018, Winn Heat Transfer leased office space under
a three year operating lease agreement. The arrangement specified
three annual rent payments of $90,000 each, beginning December 31,
2018, and at each December 31 through 2020. The lessor, HVAC
Leasing calculates lease payments based on an annual interest rate
of 8%. Winn also paid a $300,000 advance payment at the beginning
of the lease in addition to the first $90,000 rent payment. With
permission of the owner, Winn...
A. On January 1, 2021, Jack leased office space from Luna under a 20-year operating lease...
A. On January 1, 2021, Jack leased office space from Luna under
a 20-year operating lease agreement. Luna’s borrowing rate is 5%.
The lease calls for annual lease payments of $10,000 on January 1
of each year. Record all journal entries related to the lease for
2021, 2022, and 2023 for both Luna and Jack.
The following relate to an operating lease agreement: a. The lease term is 3 years, beginning...
The following relate to an operating lease agreement:
a. The lease term is 3 years, beginning January 1, 2018.
b. The leased asset cost the lessor $780,000 and had a useful
life of eight years with no residual value. The lessor uses
straight-line depreciation for its depreciable assets.
c. Annual lease payments at the beginning of each year were
$130,500.
d. Incremental costs of negotiating costs of negotiating and
consummating the completed lease transaction incurred by the lessor
were $5,250....
1.The operating cycle of a manufacturer is longer and more complex than the operating cycle of...
1.The operating cycle of a manufacturer is longer and more
complex than the operating cycle of a merchandiser.
Select one:
True
False
2.The income statement shows cost of goods sold separately from
other expenses.
Select one:
True
False
3.Inventory shrinkage is unrecorded decreases in inventory due
to breakage, shoplifting, and theft.
Select one:
True
False
4. Sales returns and allowances is an expense account and
reduces net income.
Select one:
True
False
5.Which of the following businesses is likely to...
On January 1, 2021, Winn Heat Transfer leased office space under a three-year operating lease agreement....
On January 1, 2021, Winn Heat Transfer leased office space under
a three-year operating lease agreement. The arrangement specified
three annual lease payments of $66,000 each, beginning December 31,
2021, and at each December 31 through 2023. The lessor, HVAC
Leasing calculates lease payments based on an annual interest rate
of 5%. Winn also paid a $207,000 advance payment at the beginning
of the lease. With permission of the owner, Winn made structural
modifications to the building before occupying the...
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