A lessee should classify a lease transaction as a finance lease if it is noncancelable and one or more of the five classification criteria are met. Otherwise, it is an operating lease. What are these criteria? Provide 2-3 reasons why a company would choose to lease an asset versus purchasing?

Q: Explain why companies frequently choose to lease assets and describe the basis for each of the…

A: Lease   Lease payment is the equivalent of the monthly rent, that is formally dictated under a…

Q: For the lessor to account for a lease as a sales-type lease, the lease must meet:

A: A sales-type lease assumes that the lease serves as a transfer of property to the customer, or…

Q: ! Required information Problem 13-54 (LO 13-1) (Static) [The following information applies to the…

A: Consider,Given data,The total time he worked is : 3 years 3 monthsTotal full years he worked : 3…

Q: Which of the following statements is most CORRECT? Oa. A key difference between a capital lease and…

A: A lease is a legal agreement in which one party gives another party the use of real estate or land…

Q: Describe and demonstrate how the lessee accounts for a finance lease and the lessor accounts for a…

A:

Q: Explain when and how a lessee accounts for a lease by the short-cut method.

A: The shortcut method is when the lessee and the lessor don't account for the lease at its…

Q: If, as part of the accounting for a​ lease, the lessee debits an asset and credits a​ liability,…

A: Assets have debit balance while liabilities and equity have credit balance. A lease is a contractual…

Q: Why would a lease include a contingent payment provision? Explain.

A: Contingency payment provisions is a provision for a possible event or circumstance which is not…

Q: True or false explain

A: A lease is a contractual agreement between the lessor and lessee. The owner is paid by the user…

Q: Which one of these statements is correct concerning leasing arrangements? I. The debt financing used…

A: 1) Incorrect: It is the debt of lessor and not the lessee. The lessor will get the title of assets…

Q: f the lessor meets any one of the five Group I criteria, then the lessor classifies the lease as…

A: The question is asking us to identify the type of lease based on the criteria met by the lessor. In…

Q: Why is the reporting of leases required? Justify your response.

A: A lease is an agreement where an asset is taken on rent and Lessor receives Lease rental in return.…

Q: From a lessee perspective, distinguish between a finance lease and an operating lease.

A: Lessees have available two lease accounting methods: (a) the operating method and (b) the…

Q: Why is lease reporting required? Justification for your answer.

A: A lease is an arrangement in which an asset is rented out, and the Lessor gets a rental payment in…

Q: Differentiate between an operating lease, acapital (or financial) lease, and a sale andleaseback…

A: Answer: The term operating lease would be significantly shorter than the rented asset’s life. And in…

Q: Identify the CORRECT statement regarding the effect of lease on return on capital employed. Select…

A: Taking assets on lease is the best ways to save money which was supposed to be blocked if purchased…

Q: Is there a need to amortize deferred rent income/unearned rent income in an operating lease?

A: There are two type of lease which are, (1) Operating lease  (2) Finance lease In operating lease,…

Q: If a lease does not transfer control of the asset over the lease term, the lessor will generally…

A: Sales-type lease enables the renter to use an asset temporarily while accounting for it as sold…

Q: ect of an operating lease on the income distribution schedule: a. is non-existent. b. affects…

A: Lease - Contracts or documents that transfer property from one party to another for a predetermined…

Q: In finance lease, the amount recorded as asset is the lower amount between: a. the fair value and…

A: Lease is a contract between two parties in which one party provides its asset for use to another…

Q: What are the criteria for classifying a lease as operating or capital? Why is there a difference…

A: Criteria for classifying a lease as operating or capital: There are five different types of leasing…

Q: What type(s) of leases result in an asset and a liability on the balance sheet? Select one: A.…

A: Lets understand the basics.Lease are mainly divided into two types which are,(1) operating lease(2)…

Q: is the basic concept of “substance over form” influences lease accounting? Explain.

A: Lease:A lease is a contractual agreement whereby the right to use an asset for a particular period…

Q: What are the primary benefits to a lessor of entering into a lease arrangement

A: The primary benefits to a lessor of entering into a lease arrangement will be explained:

Q: Assume a lessee leases equipment and insists on terms that qualify it as an operating lease, barely…

A: In simple term lease means it was a specific contract or agreement between the two parts to use the…

Q: A lessee should classify a lease transaction as a capital lease if it is noncancelable and one or…

A: Explain the criteria for defining the lease as capital lease or operating lease: As per the notes…

Q: Explain the distinction between a direct-financing leaseand a sales-type lease for a lessor.

A:

Q: 9. Which of the following statements is not true. (A) Capitalized leases should be reported on the…

A: A lease is a contract between a property owner and someone who wishes to use their asset. In a lease…

Q: What are the differences between a direct-financing and a sales-type lease for a lessor? Why would a…

A: First of all, let us understand the concepts of lessor and lessee. So essentially, a lessor is de…

Q: Need help with this question

A: Step 1:A lease is a contract in which  the lessee has to pay  purchase consideration to the lessor…

Q: In accounting for a finance lease/ Sale-type lease, how are the lessee's and lessor's income…

A: The income statements of the lessor and lessee are affected in finance leases and sale-type leases.…

Q: Which of the following is not one of the classifications for leases from the lessor’s viewpoint?…

A: Operating Leasing- Operating lease the right related to the asset is not transferred to the…

Q: Provide correct answer for this question

A: Step 1: Definition of LeaseA lease can be explained as a contract between two parties in which one…

Q: Under the FASB old lease standard,

A: Capital lease which is now also known as finance lease resembles financed purchases , the…

Q: The basic concept of “substance over form” influence lease accounting. Explain in detail how it does…

A: Substance over form is an accounting concept that business transactions should be accounted in…

Q: What is the difference between an operating lease and a financial,or capital, lease?

A: Lease: Leases are agreements in which the proprietor of the asset permits another party to utilize…

Leasing

Leasing is a contractual arrangement in which someone (a lessee) pays the owner (or lessor) of a building, land, vehicle, or other asset for the use of that asset. The lease is the agreement between lessee and lessor.