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The Addams Corporation is preparing to lease several large pieces of equipment. The president has asked...

The Addams Corporation is preparing to lease several large pieces of equipment. The president has asked the company’s accountant to respond to the following questions about lease accounting. a. How will Addams know if the lease is an operating lease or a capital lease? b. What is meant by off-balance sheet financing? How does off-balance sheet financing relate to the reporting of leases? c. Why is a discussion of substance over form often heard in connection with the financial reporting of a capital lease?

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ekkarill92 answered 2 years ago
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