FINANCIAL ACCOUNTING
10th Edition
ISBN: 9781259964947
Author: Libby
Publisher: MCG
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Zimmern Machines sold equipment with a 10-year economic life to Bourdain Acres, while concurrently entering
into an 8-year leaseback. Eight years is considered a major part of the economic life of the equipment. The
sale agreement contains no option for Zimmern to repurchase the equipment or any other provision that would
prevent its sale. Can Zimmern Machines account for the transaction as a sale-leaseback? Why?
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