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A government entity, which is a lessee under a finance lease. recognizes an asset acquired under a finance lease, and the related lease liability, measured at a. the fair value of the leased property at inception date * the present value of the minimum lease payments at inception date

A government entity, which is a lessee under a finance lease. recognizes an asset acquired under a finance lease, and the related lease liability, measured at a. the fair value of the leased property at inception date * the present value of the minimum lease payments at inception date

Intermediate Accounting: Reporting And Analysis
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 8RE: Use the following information to decide whether this equipment lease qualifies as an operating,...
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HOICE 1. A government entity, which is a lessee under a finance lease recognizes an asset acquired under a finance lease, and the related lease liability, measured at the fair value of the leased property at inception date * the present value of the minimum lease payments at inception date c. the lower of a and b d. the higher of a and b a. Entity A entered into a nine-vear finance lease on a warehouse on December 31, 20x1. Lease payments of P52.000, which include real estate taxes of P2,000, are due annually, beginning on December 31, 20×1, and every December 31 thereafter. Entity A does noţ know the interest rate implicit in the lease: Entity A's incremental borrowing rate is 9%. What amount should Entity A report as finance lease liabilíty at December 31, 20x1? a. X450,000 280,000 b. 291,200 d. 468,000 (AICPA) Entity A leases computer equipment to customers under direct-financing leases. The equipment has no residual vale at the end of the lease and the leases do not contain bargzin purchase options. Entity A wishes to earn 8% interest on a five-year lease of equipment with a fair value of P323,400. The first rental payment is due at the lease commencement. What is the total amount of interest revenue that Etity A will eam 8. over the life of the lease? * 129,360 d. 139,450 a. 51,600 b. (ACRA 75,000 10. On July 1, 20x6, Entity A leased a delivvery truck from Entity B under a 3-year operating lease. Total rent for the term of the lease will be P36,000, payable as followsc 12 months at P 500-P 6,000 12 months at P 750 - 9,000 12 months at PI,750= 21,00O All payments were made when đue. In Entity B's June 30, 208, balance sheet, the accrued rent receivable should be reported as to c. 12.000 d. 21,000 9,000 WIOPA
Transcribed Image Text:HOICE 1. A government entity, which is a lessee under a finance lease recognizes an asset acquired under a finance lease, and the related lease liability, measured at the fair value of the leased property at inception date * the present value of the minimum lease payments at inception date c. the lower of a and b d. the higher of a and b a. Entity A entered into a nine-vear finance lease on a warehouse on December 31, 20x1. Lease payments of P52.000, which include real estate taxes of P2,000, are due annually, beginning on December 31, 20×1, and every December 31 thereafter. Entity A does noţ know the interest rate implicit in the lease: Entity A's incremental borrowing rate is 9%. What amount should Entity A report as finance lease liabilíty at December 31, 20x1? a. X450,000 280,000 b. 291,200 d. 468,000 (AICPA) Entity A leases computer equipment to customers under direct-financing leases. The equipment has no residual vale at the end of the lease and the leases do not contain bargzin purchase options. Entity A wishes to earn 8% interest on a five-year lease of equipment with a fair value of P323,400. The first rental payment is due at the lease commencement. What is the total amount of interest revenue that Etity A will eam 8. over the life of the lease? * 129,360 d. 139,450 a. 51,600 b. (ACRA 75,000 10. On July 1, 20x6, Entity A leased a delivvery truck from Entity B under a 3-year operating lease. Total rent for the term of the lease will be P36,000, payable as followsc 12 months at P 500-P 6,000 12 months at P 750 - 9,000 12 months at PI,750= 21,00O All payments were made when đue. In Entity B's June 30, 208, balance sheet, the accrued rent receivable should be reported as to c. 12.000 d. 21,000 9,000 WIOPA
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