The buyer-lessor recognizes the asset from a sale and leaseback transaction resulting to a finance lease at? carrying amount sale price the lower of the sale price and fair value fair value
Q: Describe the effect of a “bargain-purchase option” onaccounting for a capital lease transaction by a…
A:
Q: We classify a lease as a finance lease if: Multiple Choice the present value of lease…
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Q: The lessee recognizes a loss on finance lease when the fair value of the leased asset is _______…
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Q: Answer True or False Initial direct costs are immediately recognized as an expense by the lessor…
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Q: uestion: True or False
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A: Solution: Initial direct costs incurred by the lessor in connection with specific leasing activities…
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A: Leaseback refers to the concept when an asset sold by an entity is leased back from the buyer.
Q: Answer True or False Both finance and operating leases are subject to capitalization.
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Q: Describe the effect on the lessee of a “bargain purchase option” on accounting for a finance lease…
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A: Useful life of the asset or lease term, whichever is shorter
Q: A sale and leaseback arrangement does which one of the following? Select one: O a. allows the lessor…
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A: Correct option is A. Lower; guaranteed Explanation:
Q: iability multiplied by useful life divided by total fair value of the asset. FV of rights retained…
A: Leaseback refers to the form of arrangement that sold an asset and also has an option to lease it…
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A: Solution: As per accounting standards related to lease, Initial direct costs are often incurred in…
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Q: In a sale and leaseback transaction, what is used by the buyer-lessor to depreciate the cost of the…
A: In a sale and leaseback transaction, what is used by the buyer-lessor to depreciate the cost of the…
Q: In a lease that is not assified as a manufacturer's ase, initial direct cost is * a. added to the…
A: Solution: In a lease that is not classified as a manufacturer's lease, initial direct cost is "added…
Q: TRUE OR FALSE: in a sales type lease the net investment in the lease is credited to the appropriate…
A: Lease is a financial transaction where one party, the lessor leases his asset to another party…
Q: he lessor recognizes a loss on finance lease when the fair value of the leased asset is _______ than…
A: Solution: The lessor recognizes a loss on finance lease when the fair value of the leased asset is…
Q: Which of the following statements characterizes a sales-type lease? A)The lessor recognizes only…
A: SOLUTION- SALES TYPE LEASE IS A FINANCE LEASE IN WHICH THE FAIR MARKET VALUE (OR IF LOWER , THE PV…
Q: lease
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Q: Which of the following is classified under PAS 16 - -Investment Property -Property Sold under a…
A: The following is classified under PAS 16::: Property Leased under a Finance Lease Agreement....
Q: The initial direct costs incurred in relation to a lease transaction is added to get the right of…
A: The initial direct costs incurred in relation to a lease transaction is added to get the right of…
Q: When both the gross investment and cost of the leased asset is equal for both direct and sales-type…
A: A lease is a contractual agreement between two parties wherein the lessor (owner) provides the right…
The buyer-lessor recognizes the asset from a sale and leaseback transaction resulting to a finance lease at?
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- 1. In a sale and leaseback transaction, what is used by the buyer-lessor to depreciate the cost of the leased asset? A. Lease term B. Total Useful life C. Excess of useful life over the lease term D. Remaining useful life 2. Which of the following scenarios regarding a sale and leaseback transaction would result to a loss to the seller-lessee? A. Fair Value < Carrying Amount B. Sale Price < Fair Value C.Sale Price > Fair Value D.Fair Value > Carrying Amount 3. When does a buyer-lessor recognize a financial asset from a sale and leaseback transaction? A. Sale Price > Fair Value B. Fair Value < Carrying Amount C. Sale Price < Fair Value D. Fair Value > Carrying AmountWhen does a buyer-lessor recognize a financial asset from a sale and leaseback transaction? Fair Value > Carrying Amount Fair Value < Carrying Amount Sale Price > Fair Value Sale Price < Fair ValueOf what significance is (a) an unguaranteed and (b) a guaranteed residual value in the lessor's accounting for a sales-type lease transaction?
- For a(n) ________ lease, a lessor recognizes revenue on the sale and records the asset, ________ lease. It also removes the leased asset from its accounts and records the ________. Group of answer choices sales-type; net investment in lease–sales-type; cost of goods sold finance; gross investment in lease–sales-type; cost of goods sold operating; net investment in lease–sales-type; cost of goods sold sales-type; finance; revenueIn a sale-leaseback transaction, the right-of-use asset is computed as: a. Rights retained by the lessor multiplied by rights retained by the lessee divided by FV of the asset. b. Carrying value of the asset multiplied by the FV of rights retained by the lessee divided by fair value of the asset. c. Lease liability multiplied by useful life divided by total fair value of the asset. d. FV of rights retained by the lessee multiplied FV of the asset divided by carrying value of the asset.A sale and leaseback arrangement does which one of the following? Select one: O a. allows the lessor to continue using the leased asset without any interruptions O b. provides the lessee with an immediate cash inflow equivalent to the initial lease payment O c. allows the lessee to generate cash while continuing to have use of the asset O d. provides the lessor with an immediate cash inflow equivalent to the market value of the leased asset O e. allows the lessee to retain title of the asset
- Which of the following scenarios regarding a sale and leaseback transaction would result to a loss to the seller-lessee? Fair Value < Carrying Amount Fair Value > Carrying Amount Sale Price < Fair Value Sale Price > Fair ValueIn a sale-leaseback transaction, the right-of-use asset is computed as: Group of answer choices Carrying value of the asset multiplied by the FV of rights retained by the lessee divided by fair value of the asset. Lease liability multiplied by useful life divided by total fair value of the asset. FV of rights retained by the lessee multiplied FV of the asset divided by carrying value of the asset. Rights retained by the lessor multiplied by rights retained by the lessee divided by FV of the asset.Compare the way a purchase option that is reasonably certain to be exercised and a lessee-guaranteed residual value are treated by the lessee and lessor when determining lease payments.
- Which of the following statements is true about initial direct costs? A. Initial direct costs of a sales-type lease should be expensed at the commencement of the lease only if no selling profit or loss has been incurred. B. Initial direct costs are ownership-type costs such as insurance, maintenance, and taxes. C. Initial direct costs of an operating lease should be recorded by the lessor as a prepaid asset. D. Initial direct costs should always be debited against income by the lessor in the period of the inception of the lease.The initial direct cost is added to the cost of the asset to get the netinvestment in the lease which shall be spread over the lease term. Question: True or FalseThe initial direct costs incurred in relation to a lease transaction is added to A)the cost of sales of lessee under a sales-type lease B)get the net investment for the lessor under a direct finance lease C)get the net investment for the lessor under a sales-type lease D)get the right of use asset for the lessor