Question
In: Accounting
Which of the following is not among the criteria for classifying a lease as a finance...
Which of the following is not among the criteria for classifying a
lease as a finance lease?
- The agreement specifies the ownership of the asset transfers
to the Lesee
- The agreement contains an option to purchase the underlying
asset that the lessee is reasonably certain to exercise
- The lease term is for substantially all of the remaining
economic life the underlying assets
Or
- The present value of the sum of the lease payments and any
residual value guaranteed by the Leisy that isn’t already reflected
in the lease payments equals or exceeds substantially all of the
fair value of the underlying asset
Solutions
Expert Solution
- The agreement specifies the ownership of the asset transfers to the Lesee
These are criteria of a lease
a. The lease transfers ownership of the underlying asset to the lessee by the end of the lease term.
b. The lease grants the lessee an option to purchase the
underlying asset that the lessee is reasonably certain to
exercise.
c. The lease term is for the major part of the remaining economic
life of the underlying asset. However, if the commencement date
falls at or near the end of the economic life of the underlying
asset, this criterion shall not be used for purposes of classifying
the lease.
d. The present value of the sum of the lease payments and any
residual value guaranteed by the lessee that is not already
reflected in the lease payments equals or exceeds substantially all
of the fair value of the underlying asset.
e. The underlying asset is of such a specialized nature that it is
expected to have no alternative use to the lessor at the end of the
lease term
ekkarill92 answered 2 years agoRelated Solutions
Which of the following is among the criteria for a good case analysis (as stated in...
Which of the following is among the criteria for a good case
analysis (as stated in our handout)?
Select one:
a. Don’t confuse goals with objectives
b. Don’t confuse visions with missions
c. Don’t confuse symptoms with problems
d. Don’t confuse capabilities with capacities
e. Don’t confuse strengths with opportunities
________ links a company’s ongoing environmental analysis and
the development of the marketing plan (That is, it summarizes the
results of situation analysis through the integration ad synthesis
of qualitative...
define a capital lease. What is the criteria to categorize a lease as a capital lease?...
define a capital lease. What is the criteria to categorize a
lease as a capital lease? Which financial statements are impacted
upon the determination that a lease is a capital lease?
On January 1, 2020, the company signed on a lease contract which qualifies as finance lease....
On January 1, 2020, the company signed on a lease contract which
qualifies as finance lease. It calls for annual payments of $52,538
at 1/1/2020 for the first payments, and 12/31 of each year
thereafter over a six-year lease term. The present value of total
lease payment is $280,000 under 5% annual interest rate. Make
journal entries for each of following dates, including any interest
or amortization expenses.
January 1, 2020, signs the lease contract and makes the first
payment...
Identify and briefly explain the key criteria in classifying an investment as either a subsidiary or...
Identify and briefly explain the key criteria in classifying an
investment as either a subsidiary or associate, also include as
part of your answer the key differences in accounting treatment of
each a subsidiary and associate.
Each of the four independent situations below describes a finance lease in which annual lease payments...
Each of the four independent situations below describes a
finance lease in which annual lease payments are payable at the
beginning of each year. The lessee is aware of the lessor’s
implicit rate of return. (FV of $1, PV of $1, FVA of $1, PVA of $1,
FVAD of $1 and PVAD of $1) (Use appropriate factor(s) from
the tables provided.)
Situation
1
2
3
4
Lease term (years)
4
7
5
8
Lessor's rate of return
10
%
11...
Each of the three independent situations below describes a finance lease in which annual lease payments...
Each of the three independent situations below describes a
finance lease in which annual lease payments are payable at the
beginning of each year. The lessee is aware of the lessor's
implicit rate of return. (FV of $1, PV of $1, FVA of $1, PVA of $1,
FVAD of $1 and PVAD of $1) (Use appropriate factor(s) from
the tables provided.)
Situation
1
2
3
Lease term (years)
11
21
5
Lessor's rate of return (known by lessee)
10%
8%...
Each of the three independent situations below describes a finance lease in which annual lease payments...
Each of the three independent situations below describes a
finance lease in which annual lease payments are payable at the
end of each year. The lessee is aware of the lessor’s
implicit rate of return. (FV of $1, PV of $1, FVA of $1, PVA of $1,
FVAD of $1 and PVAD of $1) (Use appropriate factor(s) from
the tables provided.)
Situation
1
2
3
Lease term (years)
9
20
4
Lessor's rate of return (known by lessee)
12%
10%...
Each of the four independent situations below describes a finance lease in which annual lease payments...
Each of the four independent situations below describes a
finance lease in which annual lease payments are payable at the
beginning of each year. The lessee is aware of the lessor’s
implicit rate of return. (FV of $1, PV of $1, FVA of $1, PVA of $1,
FVAD of $1 and PVAD of $1) (Use appropriate factor(s) from the
tables provided.) Situation 1 2 3 4 Lease term (years) 6 9 7 10
Lessor's rate of return 9 % 10...
Each of the three independent situations below describes a finance lease in which annual lease payments...
Each of the three independent situations below describes a
finance lease in which annual lease payments are payable at the
beginning of each year. The lessee is aware of the lessor's
implicit rate of return. (FV of $1, PV of $1, FVA of $1, PVA of $1,
FVAD of $1and PVAD of $1) (Use appropriate factor(s) from
the tables provided.)
Situation
1
2
3
Lease term (years)
10
20
5
Lessor's rate of return (known by lessee)
11%
9%
12%...
Each of the three independent situations below describes a finance lease in which annual lease payments...
Each of the three independent situations below describes a
finance lease in which annual lease payments are payable at the
beginning of each year. The lessee is aware of the lessor’s
implicit rate of return. (FV of $1, PV of $1, FVA of $1, PVA of $1,
FVAD of $1 and PVAD of $1) (Use appropriate factor(s) from the
tables provided.) Situation 1 2 3 Lease term (years) 10 20 4
Lessor's rate of return (known by lessee) 10% 8%...
ADVERTISEMENT
ADVERTISEMENT
Latest Questions
- explain how Texas Health Resource and Intel IT department complied with computer ethics?
- What is the signed decimal equivalent of the following signed-magnitude binary value? 11101010.1001 What is the...
- For each of the following situations provide the type of variable(s) that you would use to...
- C++ Text message decoder Use getline() to get a line of user input into a string:...
- Research aspects of the case; Janus vs. AFSCME. Know the type of union being discussed. Detail...
- When have you seen extremely creative tactics used in a communications campaign? Any successes? Any failures?
- What is the unsigned hexadecimal equivalent of the following unsigned octal value? Do NOT include in...
ADVERTISEMENT