ZuoTi.Pro
Question

If a lease does not meet any of the five classification criteria and neither of the...

If a lease does not meet any of the five classification criteria and neither of the two lessor classification criteria, a lessor would record the lease as a:

  1. Sales-type lease
  2. Direct-financing lease
  3. Operating lease
  4. Not a lease
business   accounting   
0 0
Add a comment Improve this question Transcribed image text
Next > < Previous
Sort answers by oldest

Homework Answers

Answer #1

Hi

Let me know in case you face any issue:

0 0
Add a comment
Know the answer?
Add Answer to:
If a lease does not meet any of the five classification criteria and neither of the...
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for? Ask your own homework help question. Our experts will answer your question WITHIN MINUTES for Free.
Similar Homework Help Questions

  • Assume that the five classification criteria are applied to a lease involving equipment and, because none...

    Assume that the five classification criteria are applied to a lease involving equipment and, because none of the criteria is met, it is determined that a lease should be classified as an operating lease. At the beginning of the lease, the lessee: Multiple Choice a. Does not record an entry. b. Records an entry that includes a debit to Right-of-use asset for the carrying amount of the equipment. c. Records an entry that includes a debit to Right-of-use asset for...

  • 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%

  • Company A leased equipment to Company B on January 1, 2020. The lease does not meet...

    Company A leased equipment to Company B on January 1, 2020. The lease does not meet the criteria for classification as a finance lease. The lease agreement specifies 5 annual payments of $50,000 beginning January 1, 2020. The interest rate is 6%. Which of the following is true regarding the entries made on January 1, 2020? Group of answer choices Company A records a credit to cash for $50,000. Company B records a debit to right-of-use asset for $50,000. Company...

  • Operating Lease Y Co. is an 80% owned subsidiary of X Company. On January 1, 2019,...

    Operating Lease Y Co. is an 80% owned subsidiary of X Company. On January 1, 2019, X leased equipment to Y under a four year operating lease agreement. The agreement calls for four rent annual payments of $10,000 at the end of each year. The interest rate is 2%. The cost of equipment is $90,000 and its useful life of the equipment is 10 years and no salvage value. Prepare all of the entries for both lessee and the lessor...

  • FASB CODES

    Access the FASB’s Codification Research System® at the FASB website (www.fasb.org). Determine the specific seven-digit (XXX-XX-XX) or eight-digit Codification citation (XXX-XX-XX-X) for accounting for each of the following items:Required:1. Definition of initial direct costs.2. When a modification to a contract is reported as a separate contract (that is, separate from the original contract).3. The disclosures required in the notes to the financial statements for a lessor.4. The classification criteria for when a lessee classifies a lease as a finance lease...

  • Berne Company (lessor) enters into a lease with Fox Company to lease equipment to Fox beginning...

    Berne Company (lessor) enters into a lease with Fox Company to lease equipment to Fox beginning January 1, 2016. The lease terms, provisions, and related events are as follows: 1. The lease term is 4 years. The lease is noncancelable and requires annual rental payments of $50,000 to be made at the end of each year. 2. The equipment costs $130,000. The equipment has an estimated life of 4 years and an estimated residual value at the end of the...

  • Keller Corporation (the lessee) entered into a general equipment lease with Dallo Company (the les-sor) on...

    Keller Corporation (the lessee) entered into a general equipment lease with Dallo Company (the les-sor) on January 1 of Year 1. Use the following information to decide whether this lease qualifies as an operating or finance lease for Keller, and give an explanation using the five classification criteria. 1. The equipment reverts back to the lessor at the end of the lease, and there is no bargain purchase option. 2. The lease term is 8 years and requires annual payments...

  • Ayayai Corporation entered into a lease agreement on January 1, 2020, to provide Blossom Company with...

    Ayayai Corporation entered into a lease agreement on January 1, 2020, to provide Blossom Company with a piece of machinery. The terms of the lease agreement were as follows. 1. The lease is to be for 3 years with rental payments of $13,936 to be made at the beginning of each year. 2. The machinery has a fair value of $58,000, a book value of $40,000, and an economic life of 8 years. 3. At the end of the lease...

  • Accounting lease can someone please tell me how to get the 20,000? in has this formula...

    Accounting lease can someone please tell me how to get the 20,000? in has this formula in excel: PV(H4, 4, D5 ,,0) to calculate the 20000. The problem is i don't know how to get the 20,000 manually without using excel formula. can someone help me with this question, please? I want to know to calculate that 20,000 without excel formula. please help and thanks in advance!   PV(H4,4, D5,,0) Basic lease case: Lessee enters into a 5-years le ase of...

  • The costs that (a) are associated directly with consummating a lease, (b) are essential to acquire...

    The costs that (a) are associated directly with consummating a lease, (b) are essential to acquire the lease and (c) would not have been incurred had the lease agreement not occurred are referred to as initial direct costs. Initial direct costs are added to the Lease Receivable in: A sales-type lease with a selling profit. A sales-type lease without a selling profit. Any sales-type lease. An operating lease. thats exactly how the question is asked. i copy it and send...

ADVERTISEMENT
Free Homework Help App
Download From Google Play
Scan Your Homework
to Get Instant Free Answers
Need Online Homework Help?
Ask a Question
Get Answers For Free
Most questions answered within 3 hours.
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT