Knowleage Check UT f the option is reasonably certain to be exercised, how does the inclusion of a provision that gives the lessee the option to purchase the lease asset during the ease term at a specified exercise price impact that accounting for that lease? Note: Select all that apply. Check All That Apply The lessor must classify the lease as a sales-type lease. The lessee has the option of classifying the lease as an operating lease. The lease term is assumed to end on the date that the option is expected to be exercised. In the present value calculations, the lessor adds the present value of the exercise price to the present value of the periodic lease payments to determine the amount recorded as the lease receivable.
Knowleage Check UT f the option is reasonably certain to be exercised, how does the inclusion of a provision that gives the lessee the option to purchase the lease asset during the ease term at a specified exercise price impact that accounting for that lease? Note: Select all that apply. Check All That Apply The lessor must classify the lease as a sales-type lease. The lessee has the option of classifying the lease as an operating lease. The lease term is assumed to end on the date that the option is expected to be exercised. In the present value calculations, the lessor adds the present value of the exercise price to the present value of the periodic lease payments to determine the amount recorded as the lease receivable.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Knowleage Check UT
f the option is reasonably certain to be exercised, how does the inclusion of a provision that gives the lessee the option to purchase the lease asset during the
ease term at a specified exercise price impact that accounting for that lease?
Note: Select all that apply.
Check All That Apply
The lessor must classify the lease as a sales-type lease.
The lessee has the option of classifying the lease as an operating lease.
The lease term is assumed to end on the date that the option is expected to be exercised.
In the present value calculations, the lessor adds the present value of the exercise price to the present value of the periodic lease payments to
determine the amount recorded as the lease receivable.
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