Question
In: Accounting
Which of the following is not a condition under which the lessee must record the lease...
Which of the following is not a condition under which the lessee must record the lease as finance lease?
| The lease term is equal to 60% of the economic life of the lease property. |
| The present value of the lease payments is 90% of the fair value of the property. |
| The lease contains a bargain purchase option. |
| The lease transfers ownership of the property to the lessee. |
Solutions
Expert Solution
Answer is first option- The lease term is equal to 60% of the economic life of the lease property
A lease can be classified as finance lease on meeting the recognition criteria. Lease to be classified as finance lease should be equal to 75% of the economic life of the lease property. If this condition is not met it is classified as operating lease. The lease term is calculated dividing lease period by total economic life of the lease property. Rest of the 3 conditions are part of recognition criteria for finance lease.
ekkarill92 answered 2 years agoRelated Solutions
A lease is an arrangement under which a lessor agrees to allow a lessee to control...
A lease is an arrangement under which a lessor agrees to allow a
lessee to control the use of identified property, plant, or
equipment for a stated period of time in exchange for one or more
payments. There are several types of lease designations, which
differ if an entity is the lessee or the lessor. The choices for a
lessee are that a lease can be designated as either a finance lease
or an operating lease.
Respond to the following...
SOS!! 16) Which of the following is a condition that must be met for the decertification...
SOS!!
16) Which of the following is a condition that must be met for
the decertification of a union?
a
The union must have at least hundred members.
b
The union must have served as the official bargaining agent for
the employees for at least 3 years.
c
A closed-shop agreement must have existed between the union and
the employer.
d
No labor contract must currently be in force.
7)
Question 7 (2 points)
In the context of performance-appraisal methods,...
The Harris Company is the lessee on a four-year lease with the following payments at the...
The Harris Company is the lessee on a four-year lease with the
following payments at the end of each year: Year 1: $ 17,000 Year
2: $ 22,000 Year 3: $ 27,000 Year 4: $ 32,000 An appropriate
discount rate is 7 percentage, yielding a present value of $81,556.
1. If the lease is an operating lease, what will be the initial
value of the right-of-use asset? 2. If the lease is an operating
lease, what will be the initial...
The Harris Company is the lessee on a four-year lease with the following payments at the...
The Harris Company is the lessee on a four-year lease with the
following payments at the end of each year:
Year 1:
$
11,500
Year 2:
$
16,500
Year 3:
$
21,500
Year 4:
$
26,500
An appropriate discount rate is 7 percentage, yielding a present
value of $62,927.
a-1. If the lease is an operating lease, what will
be the initial value of the right-of-use asset?
a-2. If the lease is an operating lease, what will
be the initial...
The Harris Company is the lessee on a four-year lease with the following payments at the...
The Harris Company is the lessee on a four-year lease with the
following payments at the end of each year:
Year 1:
$
12,500
Year 2:
$
17,500
Year 3:
$
22,500
Year 4:
$
27,500
An appropriate discount rate is 7 percentage, yielding a present
value of $66,314.
a-1. If the lease is an operating lease, what will
be the initial value of the right-of-use asset?
a-2. If the lease is an operating lease, what will
be the initial...
The Harris Company is the lessee on a four-year lease with the following payments at the...
The Harris Company is the lessee on a four-year lease with the
following payments at the end of each year:
Year 1:
$
11,000
Year 2:
$
16,000
Year 3:
$
21,000
Year 4:
$
26,000
An appropriate discount rate is 7 percentage, yielding a present
value of $61,233.
a-1. If the lease is an operating lease, what will
be the initial value of the right-of-use asset?
a-2. If the lease is an operating lease, what will
be the initial...
The Harris Company is the lessee on a four-year lease with the following payments at the...
The Harris Company is the lessee on a four-year lease with the
following payments at the end of each year:
Year 1:
$
11,000
Year 2:
$
16,000
Year 3:
$
21,000
Year 4:
$
26,000
An appropriate discount rate is 7 percentage, yielding a present
value of $61,233.
a-1. If the lease is an operating lease, what will
be the initial value of the right-of-use asset?
a-2. If the lease is an operating lease, what will
be the initial...
One way to structure a lease to qualify it as an operating lease for the lessee,...
One way to structure a lease to
qualify it as an operating lease for the lessee, but as a capital
lease for the lessor is to use different discount rates for the
lessees and the lessors. State the other method to achieve
the same goal.
I was thinking of Direct Financing
lease but wouldn't that be a capital lease for lessee as well? I'm
lost. Thankful for your help!
Answer this question for a lease accounted for as a finance lease by lessee, and STL...
Answer this question for a lease accounted for as a
finance lease by lessee, and STL (sales type
lease) by lessor.
a) At a signing, only the lessee records a JE involving the
asset under lease
b) Both parties record two JEs each year of the lease term, not
counting the JE at signing
c) Both parties record only one JE each year of the lease term,
not counting the JE at signing
d) Bot parties amortize (depreciate) the asset...
Which of the following best describes the condition(s) that must be present for the recognition of...
Which of the following best describes the condition(s) that must
be present for the recognition of revenue?
Group of answer choices
Revenue is recognized at the end of each reporting period.
Revenue is recognized when the good or service is provided and
payment is collected.
Revenue is recognized when no sales return is allowed.
Revenue is recognized when the good or service is provided
regardless if payment is received.
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