26 If title is not expected to pass to the lessee by the end of the lease term, lease of land is classified as A. operating lease. B. either operating lease or finance lease. C. finance lease. D. neither operating lease nor finance lease.
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26
If title is not expected to pass to the lessee by the end of the lease term, lease of land is classified as
A. operating lease.
B. either operating lease or finance lease.
C. finance lease.
D. neither operating lease nor finance lease.
Step by step
Solved in 2 steps
- Use the following information to decide whether this equipment lease qualifies as an operating, sales-type, or direct financing lease to a lessor. a. There is no transfer of ownership at the end of the lease term. There is no bargain purchase option. The lease term is 60% of the economic life of the leased property. The present value of lease payments, including a residual value guaranteed by the lessee, is 100% of the fair value of the leased property to the lessor. The collectability of the lease payments is reasonably assured. The leased asset was not of a specialized nature. b. Same as (a), except that the residual value is guaranteed by a third party, not the lessee. The present value of the residual value guarantee is 15% of the fair value of the leased property. c. Same as (a), except that: the present value of the lease payments, including a residual value guaranteed by the lessee, is only 50% of the fair value of the leased asset. The collectability of the minimum lease payments is not predictable.44. The right-of-use asset is increased by lease prepayments made by the lessee and initial direct costs incurred by the lessee. lease incentives received. initial direct costs incurred by the lessee only. prepaid lease payments only.(4) In a lease that is appropriately recorded as a direct-financing lease by the lessor, unearned income A. should be amortized over the period of the lease using the effective interest method. B. should be amortized over the period of the lease using the straight-line method. C. does not arise. D. should be recognized at the lease's expiration. E. None of these answer choices are correct.
- (48) If, as part of the accounting for a lease, the lessee debits an asset and credits a liability, then the lease must be a(n): A. Finance Lease B. Operating Lease C. Operating lease or finance lease D. none of the above45. In a lease that is recorded as a sales-type lease by the lessor, interest revenue should be recognized over the period of the lease using the straight-line method. should be recognized over the period of the lease using the effective interest method. does not arise. should be recognized in full as revenue at the lease’s inception.29 Lessors shall recognize assets held under a finance lease in a statement of financial position as a receivable at an amount equal to theA. gross investment in the lease B. net investment in the lease C. gross rentals D. residual value, whether guaranteed or unguaranteed
- 24 In a lease that is recorded as a manufacturer’s or dealer’s lease by the lessor, interest revenue should beA. recognized in full as revenue at the lease’s inception.B. recognized over the period of the lease using the straight-line method C. recognized over the period of the lease using the interest method.D. not be recognized in the accounts.1. In a lease that is recorded as a manufacturer's lease or dealer's lease by the lessor, interest revenue a. should be recognized in full as revenue at the lease's inception. b. should be recognized over the period of the lease using the straight-line method. c. should be recognized over the period of the lease using the interest method. d. does not arise.41-Depreciation for leased asset will be provided in the books of which party if the lease is classified as operating lease as per IAS 17? a. None of the option is correct b. Both lessor and lessee c. Lessor d. Lessee
- 9.When a company sells property and then leases it back, any gain on the sale should usually be Select one: a. recognized in the current year. b. recognized at the end of the lease. c. deferred and recognized as income over the term of the lease. d. recognized as a prior period adjustment.38. In an operating lease, the lessee records interest expense. lease expense. amortization expense and lease expense. amortization expense.34 Initial direct costs incurred by the lessor in an operating lease should beA. expensed in the year of incurrence by including them in the cost of goods sold or by treating them as a selling expense.B. deferred and recognized as reduction in the interest rate implicit in the lease.C. capitalized as part of asset cost and depreciated over the lease term.D. deferred and carried on the statement of financial position until the end of the lease term.