29 Lessors shall recognize assets held under a finance lease in a statement of financial position as a receivable at an amount equal to the A. gross investment in the lease B. net investment in the lease C. gross rentals D. residual value, whether guaranteed or unguaranteed

29 Lessors shall recognize assets held under a finance lease in a statement of financial position as a receivable at an amount equal to the A. gross investment in the lease B. net investment in the lease C. gross rentals D. residual value, whether guaranteed or unguaranteed

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter20: Accounting For Leases

Section: Chapter Questions

Problem 8MC: At its inception, the lease term of Lease G is 65% of the estimated remaining economic life of the...

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Question

Lessors shall recognize assets held under a finance lease in a statement of financial position as a receivable at an amount
equal to the
A. gross investment in the lease

B. net investment in the lease

C. gross rentals

D. residual value, whether guaranteed or unguaranteed

Definition Definition Financial statement that provides a snapshot of an organization's financial position at a specific point in time. It summarizes a company's assets, liabilities, and shareholder's equity, detailing what the company owns, what it owes, and what is left over for its owners. The balance sheet serves as a crucial tool to assess the financial health and stability of a company, as well as to help management make informed decisions about its future investments and financial obligations.

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At its inception, the lease term of Lease G is 65% of the estimated remaining economic life of the leased property. This lease contains a purchase option that is reasonably expected to be exercised. The lessee should record Lease G as: a. neither an asset nor a liability b. an asset but not a liability c. an expense d. an asset and a liability
23. Which of the following is true regarding IFRS 16? * a. Lessors shall recognize assets held under a contract of lease as a receivable at an amount equal to the net investment in the lease. b. Lessors shall recognize assets held under a contract of lease as a receivable at an amount equal to the cost of the asset which is the subject of the lease. c. Lessors shall recognize assets held under a finance lease as a receivable at an amount equal to the net investment in the lease. d. Lessors shall recognize assets held under a finance lease as a receivable at an amount equal to the cost of the asset which is the subject of the lease less any initial direct cost paid by the lessor.
IFRS 16 states that lessors shall recognize assets held under finance lease as a receivable at an amount equal to the gross investment in the lease. a. TRUE b. FALSE
IFRS 16 states that lessors shall recognize assets held under finance lease as a receivable at an amount equal to the gross investment in the lease. * True or false?
45. 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.
38. In an operating lease, the lessee records interest expense. lease expense. amortization expense and lease expense. amortization expense.
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.
41. The basic difference between a direct-financing lease and a sales-type lease is the allocation of initial direct costs by the lessor to periods benefited by the lease arrangements. recognition of the profit on the sale. amount of the depreciation recorded each year by the lessor. manner in which rental receipts are recorded as rental income.
28. A single lease expense is recognized on the income statement for an operating lease. a finance lease. both a finance lease and an operating lease. neither a finance lease or an operating lease.
27 In IFRS 16 par. 74, initial direct costs incurred by a lessor in consummating a manufacturer’s or dealer’s lease areA. charged to unearned income in the first period of the lease term.B. charged to expense in the first period of the lease term.C. deferred and allocated over the lease term in proportion to the recognition of rent revenue.D. deferred and allocated over the lease term on a straight-line basis.
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.
The difference of gross investment in the lease and net investment in the lease of the lessor is? A. Total amount of interest that the lessee shall recognized as interest expense over the lease term. B. Interest income at inception of the lease. C. Total amount of interest that the lessor shall recognized as interest income over the lease term. D. Initial direct cost.