If a sale and leaseback transaction results in a finance lease, any excess of sale proceeds over the carrying amount shall be I. Recognized immediately as income by the seller-lessee. II. Deferred and amortized as income by the seller-lessee over the lease term. Either I or II II only I only Neither I nor II

If a sale and leaseback transaction results in a finance lease, any excess of sale proceeds over the carrying amount shall be I. Recognized immediately as income by the seller-lessee. II. Deferred and amortized as income by the seller-lessee over the lease term. Either I or II II only I only Neither I nor II

Financial Accounting Intro Concepts Meth/Uses

14th Edition

ISBN:9781285595047

Author:Weil

Publisher:Weil

Chapter11: Notes, Bonds, And Leases

Section: Chapter Questions

Problem 12Q

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For a lessor, the leased asset appears on the balance sheet and continues to be depreciatedwhen the lease is classifi ed as:A . a sales-type lease.B . an operating lease.C . a fi nancing lease.
$1: Advance rentals representing option money as well as security deposits to insure faithful performance of certain obligations of the lessee (refundable deposits) are considered part of the lessee's taxable income. S2: Obligations of the lessor to third persons paid or assumed by the lessee in consideration of the lease contract is part of the former's taxable rental income. OS1 is true; S2 is false; OS1 is false; S2 is true OS1 is false; S2 is false OS1 is true; S2 is true
1. In a lease that is recorded as a manufacturer's lease or dealer's lease by the lessor, interest revenue * O a. should be recognized in full as revenue at the lease's inception. O b. should be recognized over the period of the lease using the straight-line method. O c. should be recognized over the period of the lease using the interest method. O d. does not arise.
IFRS 16 states that lessors shall recognize assets held under finance lease as a receivable at an amount equal to the gross investment in the lease. a. TRUE b. FALSE
(4) In a lease that is appropriately recorded as a direct-financing lease by the lessor, unearned income A. should be amortized over the period of the lease using the effective interest method. B. should be amortized over the period of the lease using the straight-line method. C. does not arise. D. should be recognized at the lease's expiration. E. None of these answer choices are correct.
Which of the following is true regarding IFRS 16? a. Lessors shall recognize assets held under a contract of lease as a receivable at an amount equal to the net investment in the lease. b. Lessors shall recognize assets held under a contract of lease as a receivable at an amount equal to the cost of the asset which is the subject of the lease. c. Lessors shall recognize assets held under a finance lease as a receivable at an amount equal to the net investment in the lease. d. Lessors shall recognize assets held under a finance lease as a receivable at an amount equal to the cost of the asset which is the subject of the lease less any initial direct cost paid by the lessor.
Which of the following statements is correct related to lease? a. The leased asset is depreciated over the asset's useful life or lease term whichever is higher. b. The leased asset is depreciated over the asset's useful life. c. The leased asset is recorded using the higher amount between fair value of the asset and present value of the minimum lease payments. d. Under IFRS 16 a lease is defined as ‘a contract that conveys the right to use an asset for a period of time in exchange for consideration'.
Which of the following statements characterizes a sales-type lease? The lessor recognizes only interest revenue over the life of the asset.. The lessor recognizes a dealer profit at lease inception and interest revenue over the lease term. The lessor recognizes a dealer profit at lease inception and interest revenue over the useful life. The lessor recognizes only interest revenue over the lease term.
In a sale-leaseback transaction, the lease liability is equals to: A. PV of lease payments accruing to the lessor B. PV of lease payments accruing to the lessor plus any additional financing C. PV of lease payments accruing to the lessor less any prepayments D. PV of lease payments accruing to the lessee
Generally accepted accounting principles require that certain leaseagreements be accounted for as purchases. The theoretical basis for thistreatment is that a lease of this type A. Effectively conveys all of the benefits and risks incident to the ownership of property B. Is an example of form over substance C. Provides the use of the leased asset to the lessee for a limited period of time D. Must be recorded in accordance with the concept of cause and effect
Which of the following is /are usually correct regarding operating leases? I. The lessor will recoup the entire cost of the leased asset during the term of the original lease. II. The leases are fully amortized. III. The lessee has an obligation under the cancellation option to cancel the lease contract prior to the expiration date. IV. The lessor is responsible for insuring the leased asset. Select one: O a. IIl and IV only O b. IV only O c. I, II, and IV only O d. I and III only
Which of the following are normal characteristics of a financial lease? I. Maintenance of the leased asset is the responsibility of the lessee. II. The lease is generally cancellable by the lessee prior to the expiration date. III. Financial leases are generally fully amortized. IV. The lessee usually has the right to renew the lease at the end of the initial lease period. Select one: O a. I, II, III, and IV O b. I, II, and IV only O c. II, II, and IV only O d. I and Il only Oe. I and II only