Under the new lease rules, companies classify leases 1）the same as in previous years 2)generally as...
Under the new lease rules, companies classify leases
1）the same as in previous years
2)generally as short-term
3)generally as long-term
4)mostly off the balance sheet
Homework Answers
The new lease rules has an exception to short term leases or a lease with period less than 12 months. Leases are not an off balance sheet item. Apart from the exceptions provided, there is a change in the lease recognition principle which implies the treatment cannot be similar as of the previous years.
As there is no other distinguished option given in the question, we are left with one option which is companies classifies leases generally as long-term(option no.3).
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Under the new lease rules, companies classify leases
1）the same as in previous years
2)generally as...
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When the loan is first obtained, $300,000 will be posted in
the long- term debt account and will appear on the balance sheet.
At the end of the first year, Sunnyvale will pay the bank a total
of $130,000, consisting of $30,000 interest on the loan and
$100,000 repayment on the principal portion of the loan. The
$30,000 interest expense, which is paid to the bank for the use of
its money, appears as an expense on the income statement....
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