Homework Answers
The lease term is for the major part of the economic life of the asset is one of the criteria for recording a lease as a finance lease,under IFRS.
Therefore answer is option (A)
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25. Which of the following is a one of the criteria for recording a lease as...
Which of the following lease criteria would not qualify a lease as a capital lease? Multiple...
Which of the following lease criteria would not qualify a lease as a capital lease? Multiple Choice The lease term is equal to or greater than 75% of the estimated economic life of the leased property. The lease transfers ownership of the property to the lessee by the end of the lease term. The present value of the minimum lease payments equals or exceeds 90% of the fair value of the leased property. The lease contains an option to purchase...
Under U.S. GAAP, which of the following items would require a lessee to classify a lease of equipment as a capital lease...
Under U.S. GAAP, which of the following items would require a lessee to classify a lease of equipment as a capital lease? a. The lease term is 90% of the estimated economic life of the lease property. b. The lease does not contain a bargain purchase option. c. The present value of the contractual minimum lease payments is 75% of the fair value of the leased property. d. There is no transfer of ownership to the lessee at the end...
Executory costs include a) maintenance, interest and property taxes. b) interest, property taxes and depreciation. c)...
Executory costs include a) maintenance, interest and property taxes. b) interest, property taxes and depreciation. c) insurance, maintenance and property taxes. d) maintenance, insurance and income taxes. Which of the following is a correct statement regarding one of the ASPE capitalization criteria? a) The lease transfers ownership of the property to the lessor. b) The lease must contain a bargain purchase option. c) The lease term is 75% or more of the leased property’s estimated economic life. d) The fair...
Of the five criteria for a finance lease, which one is not applied if the lease...
Of the five criteria for a finance lease, which one is not applied if the lease begins ”at or near the end” of the economic life of the underlying asset? Multiple Choice A)The passage of title criteria. B)The economic life test. C)A purchase option is reasonably certain to be exercised. D)The present value of lease payments greater or equal to substantially all of fair value test.
Prepare a lease amortization schedule for NextCar for the 5-year term.
The following facts pertain to a non-cancelable lease agreement between Ford and NextCar, a lessee. Lease Origination Date May 1, 2017 Annual lease payments due at the beginning of each lease year $20.471.94 Bargain purchase option price at the end of lease term $4,000 Lease term 5 years Economic life of leased equipment 10 years Lessor’s cost $65,000 Fair value of asset on May 1, 2017 $91,000 Fair value of asset on May 1, 2022 ...
Problem 4: Assume the same facts as for Problem 3. A. For the lessor, is the lease a finance lease (sales-type) or...
Problem 4: Assume the same facts as for Problem 3. A. For the lessor, is the lease a finance lease (sales-type) or an operating lease? Explain why or why not. B. Prepare the lessor's journal entries through 12/31/Yr1. Problem 3: The following facts pertain to a non-cancelable lease agreement between Lessee and Lessor: Date of the Lease 12/31/YO Annual lease payment (Payment 1 due immediately) $20,472 Bargain Purchase Option (Lessee expects to exercise) $4,000 Lease Term 5 years Economic Life...
The following facts pertain to a non-cancelable lease agreement between Ford and NextCar, a lessee. ...
The following facts pertain to a non-cancelable lease agreement between Ford and NextCar, a lessee. Lease Origination Date May 1, 2017 Annual lease payments due at the beginning of each lease year $20.471.94 Bargain purchase option price at the end of lease term $4,000 Lease term 5 years Economic life of leased equipment 10 years Lessor’s cost $65,000 Fair value of asset on May 1, 2017 $91,000 ...
The following facts pertain to a non-cancelable lease agreement between Ford and NextCar, a lessee. ...
The following facts pertain to a non-cancelable lease agreement between Ford and NextCar, a lessee. Lease Origination Date May 1, 2017 Annual lease payments due at the beginning of each lease year $20.471.94 Bargain purchase option price at the end of lease term $4,000 Lease term 5 years Economic life of leased equipment 10 years Lessor’s cost $65,000 Fair value of asset on May 1, 2017 $91,000 ...
Which of the following is not a sufficient criterion for a lessor to classify a lease...
Which of the following is not a sufficient criterion for a lessor to classify a lease as a sales-type lease? Multiple Choice The lease transfers Ownership of the leased asset to the lessee at the end of the lease term. O The lessee has the option of acquiring the asset during or at the end of the lease term at a bargain price. O The present value of the lease payments is greater than the carrying value of the leased...
One of the criteria for a lease to be classified as a sales-type lease by the...
One of the criteria for a lease to be classified as a sales-type lease by the lessor is that the present value of the sum of (1) the lease payments and (2) any residual value guaranteed by the lessee equals or exceeds substantially all of the fair value of the leased asset. Substantially all of the fair value of the leased asset generally is considered to be O 90% 25% 60% 75%
Problem 4: Assume the same facts as for Problem 3. A. For the lessor, is the lease a finance lease (sales-type) or an operating lease? Explain why or why not. B. Prepare the lessor's journal entries through 12/31/Yr1. Problem 3: The following facts pertain to a non-cancelable lease agreement between Lessee and Lessor: Date of the Lease 12/31/YO Annual lease payment (Payment 1 due immediately) $20,472 Bargain Purchase Option (Lessee expects to exercise) $4,000 Lease Term 5 years Economic Life...
Which of the following is not a sufficient criterion for a lessor to classify a lease as a sales-type lease? Multiple Choice The lease transfers Ownership of the leased asset to the lessee at the end of the lease term. O The lessee has the option of acquiring the asset during or at the end of the lease term at a bargain price. O The present value of the lease payments is greater than the carrying value of the leased...
One of the criteria for a lease to be classified as a sales-type lease by the lessor is that the present value of the sum of (1) the lease payments and (2) any residual value guaranteed by the lessee equals or exceeds substantially all of the fair value of the leased asset. Substantially all of the fair value of the leased asset generally is considered to be O 90% 25% 60% 75%
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