Case 13-1 Recording an Operating lease Noel Company leases 25 cell phones for three years. The...
Case 13-1 Recording an Operating lease
Noel Company leases 25 cell phones for three years. The rent for the phones is $1,700 a month for 36 months ($61,200 in total). The fair value of the leased phones is $65,000. Noel’s has an 5.5% incremental borrowing rate and the PV of the lease payments is $56,557.
Required:
- How would Noel have recorded this transaction under SFAS No. 13?
- How should Noel record this transaction under FASB ASC 842?
Please show work! Thank you!!
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Case 13-1 Recording an Operating lease
Noel Company leases 25 cell phones for three years. The...
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Seven Wonders cannot renew the lease, there is no bargain purchase
option, and ownership of the leased asset reverts to Moss at the
lease end. The leased asset has an expected useful life of six...
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