If the lessee and lessor use different interest rates to account for a finance/sales-type lease, then what is going wrong?

Q: In a sale-leaseback transaction the owner of an asset sells it and immediately leases it back from…

A: Sale-Leaseback approach: In the sale-leaseback approach, the owner of the leased asset sells it and…

Q: Want to the answer

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

Q: Which of the following is not a criterion for a lease to be recorded as a finance lease?(a) There is…

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

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

A:

Q: How does a leveraged lease differ from a nonleveraged lease?

A: A leveraged lease is an agreement that is partially financed by the third party creditor. In this…

Q: Under ASPE, the lessor is required to expense any direct costs associated with a lease up front.…

A: Accounting Standards for Private Enterprises Accounting Standards for Private Enterprises is an…

Q: In a Type A lease, “front loading” of lease expense and lease revenue occurs. What does this mean,…

A: Lease:An agreement of contract that is made to transfer the right to utlize the resources for a…

Q: What is the difference between an “operating” and a “capital” lease? In easy terms please!

A: The criteria for defining the lease as a capital lease or operating lease   As per the notes issued…

Q: What do we mean by overage in a retail lease agreement? How might it be calculated?

A: Overage on retail lease contract and its computation as follows: Retail lease contracts show a least…

Q: When are initial direct costs recognized in an operating lease? In a sales-type lease with selling…

A: Initial direct cost paid by the lessee is added to the right-of-use asset. If incurred by the…

Q: What do you think is the main difference of accounting for lease on the part of the lessee and…

A: Lease is regarded as the contract between two parties those to use the asset of the owner by another…

Q: ) If a lease does not qualify as an operating lease, how will a lessee classify the lease? (1. Short…

A: A lease is a contractual agreement between two parties, the lessor (owner) and the lessee (user),…

Q: Describe the effect on the lessee of a “bargain purchase option” on accounting for a finance lease…

A: Lease agreement refers to an agreement in which a contract is made to get the asset on lease. The…

Q: What is the difference between a tax-oriented lease and a nontax-oriented lease?

A: A tax-oriented lease: A tax-oriented lease, occasionally named a true lease, which offer the lessor…

Q: Does a lessee have an option not to separate lease and non lease components?

A: Lease: A lease or a lease agreement is a binding contract between two parties that dictates…

Q: Which one of the following accurately describes an aspect /aspects of a leveraged lease? I. The…

A: The question is related to the Leveraged Lease. In a leveraged lease, the lessor invests some money…

Q: Which of the following typically represents an advantage of leasing over purchasing an asset with an…

A: When a fixed asset is needed by business, then it can purchase the asset or it can take that asset…

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: ect the le

A: Introduction : In simple words, leasing refers to the phenomenon under which an one entity use the…

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: Would using a higher discount rate increase or decrease the amount of lease liability recorded?

A: Lease: A contractual agreement for an asset between two parties. The parties involved are lessee and…

Q: Why is lease financing sometimes referred to as off–balance sheetfinancing?

A: Lease is a type of an agreement that involves two parties i.e. owner (lessor) and lessee. In this…

Q: Why might refinancing be considered an alternative to a sale-leaseback?

A: Introduction: The given question is related to the concept of real estate finance and investments.…

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: 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 is meant by the term “off-balance sheet financing”? When do leases provide such financing and…

A: Financing in the normal course means the company has taken a loan from the investor when there is a…

Q: The effect of an operating lease on the income distribution schedule: checked a. is non-existent…

A: When one asset is given for the purpose of use to another person on rent, it is called lease. The…

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

A:

Q: Explain the difference in lessee income statement and balance sheet presentation for a finance…

A: Lease agreement refers to an agreement in which a contract is made to get the asset on lease. The…

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: What are the disadvantages of lease?

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

Q: What is selling profit on a sales-type lease? How do we account for a sales-type lease with a…

A: Sales-type lease: Sales type lease in equivalent type of direct financing whereby the owner (lessor)…

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: Can the present value of minimum lease payments differ between the lessor and lessee? If so, how?

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

Q: If the gains or losses from the fluctuation in the fair value of the residual accrue to the lessor,…

A: Lease accounting is the accounting to adjust the transaction where a fixed asset is taken on rent…

Q: What is meant by Non-Cancellable lease?

A: Lease: It is an agreement between two parties in which one party agrees to give an asset on lease…

Q: Briefly explain two disadvantages of sale and leaseback transactions

A: In a sale and leaseback, a business sells a structure that it both owns and occupies while also…

Q: How does Lease payments often are lower than installment payments?

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

Q: How does the analysis of a sale-leaseback differ from the analysis of owning versus leasing?

A: A sale lease back is very beneficial for the company because it helps the company to sell the asset…

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…

Q: Under a sales-type lease without an operating profit, how is the lessor's cost (1.e., the initial…

A: Solution:- Definition :-  It is a lease, which transfers substantially all the risk and rewards…

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.