Long-term liabilities are obligations due for a period of time greater than one year. Select one: O True O False
Q: A lease might specify that rental payments may be increased (or decreased) at some future time…
A: The contingent rentals are excluded from lease payments. Instead they are reported in the disclosure…
Q: Total project value ($) Debt Option Loan-to-value Rate (%) Interest only period (years) Amortization…
A: OptionProject ValueLoan %Loan AmountAnnual Interest rateAmortisation…
Q: Decreases in the projected benefit obligation due to an increase in interest rate are called (enter…
A: A projected benefit obligation (PBO) is an actuarial measurement of what a company will need at the…
Q: The life-expectancy adjusted withdrawal plan is a variation of the... a) fixed-period withdrawal…
A: Life-expectancy adjusted withdrawal plan (LEAP):The life-expectancy adjusted withdrawal plan (LEAP)…
Q: 3. Which of the following is true in regards to the reassessment of the lease term? A. If the lessee…
A: Lease term is the time period agreed by the lessee and the lessor for which the asset shall be…
Q: Each period of a finance lease, the lessee records a lease expense that includes which of the…
A: The objective of the question is to identify the components that are included in the lease expense…
Q: b.bond payable c.two-year note payable
A: Current liabilities are a company's short-term financial commitments due within a year or during a…
Q: For most long-term liabilities, an important consideration is that they are properly authorized.…
A: The long term liability is reported as a long term because they covers many years and the majority…
Q: what conditions are not necessary to exclude a short term obligation from current liabilities?
A: Current liabilities: It refers to short term financial obligations that are to be discharged within…
Q: The discount rate influences virtually every amount reported in connection with a lease by both the…
A:
Q: A lease might specify that lease payments may be increased (or decreased) at some future time during…
A:
Q: When is an estimated loss on a long-term contract recognized, both for contracts that recognize…
A: Revenue recognized point of long term contract: A long-term contract qualifies for revenue…
Q: . The Lease Liability account should be presented as * O all current liabilities. O deferred…
A: The lease liability is the financial obligation for lease payments recorded at present value for the…
Q: Listed below are 15 terms followed by a list of phrases that describe or characterize each of the…
A: Interest expense: Outstanding balance times effective rate. Disclosure only: Nonlease payments.…
Q: long-term basis at the end of
A: Short-term obligation are those which mature within a period of one year. Long term obligations are…
Q: Which of the following statements about an accrual annuity is correct? Select one: a. The taxable…
A: Step 1: The correct statement is:b. The taxable portion of an accrual annuity is higher in earlier…
Q: The effect of a lender agreeing to give the borrowing entity a grace period after the reporting…
A: PAS 1, deals with the situations arising after the breach of loan covenants and provides a grace…
Q: A capital (or "financing") lease usually calls for an annual expense deduction equal to the lease…
A: Leasing is a financial instrument that can be used by the investors instead of buying an asset for…
Q: The basic difference between a direct-financing lease and a sales-type lease is the allocation of…
A: A lease is an agreement that describes terms and conditions. It is an agreement, where one party…
Q: What is General Annuity? (payment interval and interest period, time of payment, duration)
A: An annuity is a contract between you and an insurance company in which you make a lump-sum payment…
Q: implicit interest rate
A: What rate is most likely used when computing the present value of the new lease liability arising…
Q: n amount paid by the lessee to the lessor in addition to the periodic rental which is treated by the…
A: Solution: Lease bonus in addition to the lease payment are considered as unearned rent income for…
Q: Obligations that may arise from past transactions only if certain events occur in the future are…
A: The objective of the question is to understand the concept of contingent liabilities in accounting.
Q: If a problem is silent as to whether a warranty payable is short-term or long-term, will it be…
A: Warranty payable represents a liability account that reports the estimated amount that a company…
Q: When valuing a short-term security, we commonly use:
A: Introduction: Short-term securities refer to securities that have a life tenure of less than one…
Q: Which of the following is a charteristic of a current liability
A: Liability: Liability is the obligation of the company to pay which comes from a past activity done…
Q: In constructing the amortization schedule, the Principal at the Beginning for the second period is…
A: Amortization schedule is the schedule that depicts the complete repayment of a loan including the…
Q: Describe the obligations of long term liabilities.
A: Long-term liabilities: Long-term liabilities are obligations that the company needs to pay after at…
Q: For which of the following conditions will the lessor classify a lease as a sales-type lease? A.…
A: Lease classify as sale type lease means it is a financial lease where lessor has given right to use…
Q: Which of the following is most likely to be classified and reported as current liability? a. Bond…
A: The liabilities that are payable within one year are classified as current liabilities. It includes…
Q: For a finance lease, the lease obligation of the lessee would be reduced periodically by a. the…
A: Solution: For a finance lease, the lease obligation of the lessee would be reduced periodically by…
Q: In practice, interest rates do not stay the same over time unless by contractual obligation. Select…
A: Interest rate is the percentage amount of interest which is due per period and is calculated as a…
Q: If in each interval of time agreed upon in an obligation, interest is added to the principal,…
A: Compound Interest: In this concept, the interest is calculated on principal and interest accumulated…
Q: ________ are long-term debt instrument that promise a fixed income in the form of interest.
A: Debt instrument is a way of financing which can guarantee a fixed income, hence a less risky…
Q: The discount rate influences virtually every amount reported in connection with a lease by both the…
A: The lessor’s discount rate is the effective interest rate when determining the present value of…
Q: Uniform series transactions involve some uniform amount either being deposited or withdrawn at the…
A: Deposits are transactions involving transfer of money to another party (generally a bank) for…
Q: If an insured fails to pay the premium when due, the insured's heallh policy will remain in force…
A: Health insurance is a type of insurance that helps to pays for medical costs incurred as a result of…
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- Which one of the following would normally lead to a lease being classified as an operating lease? a. The lease term is for a period of more than half of the expected economic life of the underlying asset. b. At the inception date of the lease agreement, the present value of the total lease payments is for an amount substantially less than the fair value of the underlying asset. c. The lease is cancellable, and all losses associated with the cancellation will be incurred by the lessee. d. It is reasonably certain at the inception date that the lessee will exercise an option to purchase the underlying asset at the end of the lease term for a price substantially lower than its expected fair value.On the balance sheet, the lease liability is measured as ________. Group of answer choices the present value of the lease payments less the present value of the guaranteed residual value (if any) the present value of the lease payments plus the future value of the guaranteed residual value (if any) the present value of the lease payments plus the present value of the guaranteed residual value if the lessee guarantees it(if any) the future value of the lease payments plus the future value of the guaranteed residual value (if any)_____ is a contract that involves compensation for specific potential future losses in exchange for periodic payments and that provides for the transfer of the risk of a loss, from one entity to another, in exchange for a premium. a.Spot contract b.Insurance c.Hedging d. Forward contract
- 3. For a finance lease, the lease obligation of the lessee would be reduced periodically by a. the lease payment less the portion allocable to interest. b. the lease payment plus the interest expense for the period. c. the lease payment less depreciation expense if the lessee records depreciation. d. the lease payment less the amortization if the initial lease liability is more than the face amount, or plus the amortization if the initial lease liability is less than the face amount. e. none of the above. 4. Initial direct costs incurred by the lessor in connection with specific leasing activities as in negotiating and securing leasing arrangements in a direct finance lease would * a. result to an increase of the implicit interest rate. b. result to a decrease of the implicit interest rate. c. result to either an increase or a decrease of the implicit interest rate depending on the given facts. d. be ignored if the lease qualifies as a dealer's lease.The lessee normally measures the lease liability to be recorded as the: Select one: a. Present value of the minimum lease payments. b. The future value of the minimum lease payments c. The fair market value of the leased asset. d. The sum of the cash payments over the term of the lease.When a lessor receives cash on an operating lease, which of the following accounts is increased? A. Lease Payable B. Interest Revenue: Leases C. Lease Receivable D. Rent Revenue
- For a finance lease, the lease obligation of the lessee would be reduced periodically by a. the lease payment less the portion allocable to interest. b. the lease payment plus the interest expense for the period. c. the lease payment less depreciation expense if the lessee records depreciation. d. the lease payment less the amortization if the initial lease liability is more than the face amount, or plus the amortization if the initial lease liability is less than the face amount. e. none of the above.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 onlyContingent liabilities must be recorded if: O The future event is probable and the amount owed can be reasonably estimated O The future event is remote O The future event is reasonably possible O The amount owed cannot be reasonably estimated All of the above
- A fixed-income security is defined as. A) a debt obligation that pays a fixed rate of return for a one-year period of time. B) common or preferred stock that pays a fixed annual dividend C) a long-term debt obligation that pays scheduled fixed payments. D) long-term debt issued solely by a federal or state government E) any security originally issued as either debt or equity that pays a fixed, pre-se p et paymentWhen is it appropriate for the lessee to use the lessor's implicit rate to calculate the present value of the lease payments? A.when the lessee's incremental borrowing rate is lower than the lessor's rate B.whenever the lessee knows what the lessor's rate is C.when the lessor's implicit rate is lower than the lessee's incremental borrowing rate D.when the lessor's rate is higher than the lessee's incremental borrowing rateFor which of the following conditions will the lessor classify a lease as a sales-type lease? a.The leased asset may be exchanged for a similar asset during the lease term. b.The present value of the sum of the lease payments is equal to or more than the fair value of the underlying asset. c.The lease term is less than one year. d.The lease term is half of the underlying asset’s economic life.