Question 5 Which of the following would be included in the computation of the minimum lease...
Question 5 Which of the following would be included in the computation of the minimum lease payment/Lease Receivable? Guaranteed residual value. Penalty for failure to renew. A bargain purchase option. All of these answers are correct.
Homework Answers
computation of the minimum lease payment/Lease Receivable
includes All of these answers are correct
For calculating minimum lease payment following should be included
Rentals + Guaranteed residual value + Penalty for failure to renew + bargain purchase option - Executory Cost.
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Question 5 Which of the following would be included in the
computation of the minimum lease...
Under a sales-type lease without an operating profit, how is the lessor’s cost (i.e., the initial...
Under a sales-type lease without an operating profit, how is the lessor’s cost (i.e., the initial Lease Receivable account) computed: When there is no bargain purchase option or residual value? When there is a bargain purchase option? When there is no bargain purchase option but there is a guaranteed residual value? When there is no bargain purchase option but there is an unguaranteed residual value? Which discount rate does the lessor use in computing the lessor’s cost (lease receivable)—the lessor’s...
14. Which of the following statements regarding the calculation of the lessee's depreciation expense for a...
14. Which of the following statements regarding the calculation of the lessee's depreciation expense for a finance lease is true? a. The bargain purchase option price is deducted from the original cost capitalized, and the difference is allocated over the estimated economic life of the asset. b. The bargain purchase option price is included in the original cost capitalized, and depreciated over the term of the lease. c. The unguaranteed residual value is included in the original cost capitalized, and...
Under a finance lease, how is the lessee’s cost (i.e., the initial Lease Payable account) computed:...
Under a finance lease, how is the lessee’s cost (i.e., the initial Lease Payable account) computed: When there is no bargain purchase option or residual value? When there is a bargain purchase option? When there is no bargain purchase option but there is a guaranteed residual value? When there is no bargain purchase option but there is an unguaranteed residual value? Which discount rate does the lessee use in computing the lessee’s cost (Lease payable)—the lessor’s implicit rate or the...
Which of the following would be included in the Lease Receivable account? I. Guaranteed residual value. II. Unguaranteed...
Which of the following would be included in the Lease Receivable account? I. Guaranteed residual value. II. Unguaranteed residual value. III. Executory costs IV. Rental payments. Select one: a. I, II and IV b. II, III, and IV c. I and II only d. I and III only
When a lessee makes an entry at the beginning of a lease, which of the following are included in the amount that will be...
When a lessee makes an entry at the beginning of a lease, which of the following are included in the amount that will be recorded as both a right-of-use asset and a lease liability? (Select all that apply.) Fair value of the asset leased Present value of a cash payment expected to be made at the end of the lease term because of a guaranteed residual value Present value of expected residual value Present value of periodic lease payments Sum...
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...
1.Describe the following terms: (a) residual value, (b) guaranteed residual value, and (c) initial direct costs....
1.Describe the following terms: (a) residual value, (b) guaranteed residual value, and (c) initial direct costs. 2.Explain the following concepts: (a) bargain purchase option and (b) bargain renewal option. 3.What payments are included in the lease liability? 4. Describe the accounting procedures involved in applying the operating lease method by a lessee.
When a lessee makes an entry at the beginning of a lease, which of the following...
When a lessee makes an entry at the beginning of a lease, which of the following are included in the amount that will be recorded as both a right-of-use asset and a lease liability? (Select all that apply.) Check All That Apply Fair value of the asset leased Fair value of the asset leased Present value of a cash payment expected to be made at the end of the lease term because of a guaranteed residual value Present value of...
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...
Giselle Ltd enters into a finance lease agreement on the following terms. What is the fair...
Giselle Ltd enters into a finance lease agreement on the following terms. What is the fair value of the equipment at the inception of the lease (rounded to the nearest dollar)? [3.3121.0.7350] Duration of lease 4 years Life of leased asset 6 years Guaranteed residual $0 Unguaranteed residual $0 Bargain Purchase Option $4,000 Lease payment at inception $0 Annual lease payments (paid at year ends) $10,000 Interest rate implicit in lease 8% $34 518 $39 736 $36 061 $33 121
Giselle Ltd enters into a finance lease agreement on the following terms. What is the fair value of the equipment at the inception of the lease (rounded to the nearest dollar)? [3.3121.0.7350] Duration of lease 4 years Life of leased asset 6 years Guaranteed residual $0 Unguaranteed residual $0 Bargain Purchase Option $4,000 Lease payment at inception $0 Annual lease payments (paid at year ends) $10,000 Interest rate implicit in lease 8% $34 518 $39 736 $36 061 $33 121
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