In: Accounting
Costco leased equipment from Cat Company under a four-year lease
requiring equal annual payments of $170,000,...
Costco leased equipment from Cat Company under a four-year lease
requiring equal annual payments of $170,000, with the first payment
due at lease inception. The lease does not transfer ownership, nor
is there a bargain purchase option. The equipment has a 4-year
useful life and a $1,000 guaranteed residual value. If Costco,
incremental borrowing rate is 8%, what is the amount recorded for
the asset at the lease inception?
Which of the following would be considered a capital lease?
Assume all leases are noncancelable.
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Lessee rents equipment for 5 years. The equipment has a useful
life of 8 years. |
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Lessee rents equipment no bargain purchase option. |
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Lessee rents equipment, but the ownership does not transfer
over. |
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Lessee rents equipment in which the present value of the
minimum lease payments are $40,000 and the fair value of the
equipment is $42,000 |