Among the four types of leases: Lessor’s sales-type lease, Lessor’s operating lease Lessee’s finance lease, Lessee’s operating lease Which type(s) of lease will record Lease Liability upon the inception of the lease? Enter the number that represents the correct answer. Lessee’s finance lease, Lessee’s operating lease, and Lessor’s sales-type lease Lessee’s finance lease and Lessee’s operating lease Lessee’s finance lease only Lessee’s operating lease only

Among the four types of leases: Lessor’s sales-type lease, Lessor’s operating lease Lessee’s finance lease, Lessee’s operating lease Which type(s) of lease will record Lease Liability upon the inception of the lease? Enter the number that represents the correct answer. Lessee’s finance lease, Lessee’s operating lease, and Lessor’s sales-type lease Lessee’s finance lease and Lessee’s operating lease Lessee’s finance lease only Lessee’s operating lease only

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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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.
Which of the following is a criterion for classifying a lease for a lessee as a finance lease? The lease term is for a major part of the asset’s economic life. The lease transfers ownership of the asset to the lessee at the end of the lease term. The present value of the lease payments equals or exceeds substantially the asset’s fair value. All of the above.
Which of the following statements is correct in accordance with AASB 16 Leases? Group of answer choices A lease contract, or part of a lease contract, conveys the right to transfer ownership of an asset for a period of time in exchange for consideration. Payments that are made by a lessee at commencement date are included in the initial amount recognised for the lease liability. Payment for executory costs reimbursed by the lessee after being paid by the lessor on behalf of the lessee are included in the calculation of lease payments. Variable lease payments may be increased or decreased during the lease term because of changes in facts and circumstances occurring after the asset is made available to the lessee to use, other than the passage of time.
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.
Initially, a lease liability is measured a. by the lessee at the present value of the lease payments that are not paid at the commencement date of the lease. b. by the lessor at the present value of the total lease payments payable at the commencement date of the lease. c. by the lessor at the total cost of the right-of-use asset. d. by the lessee at the total cost of the right-of-use asset.
On the lessor’s accounting, which of the following situations would prima facie lead to a lease contract being classified as an operating lease? Lease term is for a major part of the asset’s useful life Existence of a bargain purchase option Present value of minimum lease payments is 50% of the fair value of the leased asset Transfer of ownership by end of lease term
At the beginning of a Type B lease, the lessor will record what asset and liability, if any?
Which of the following is NOT a correct statement of one of the lease classification test for the lessee? If the lease transfers ownership of the property to the lessee, it will be classified as a finance lease If the lease contains a bargain purchase option, it will be classified as a finance lease If the lease term is equal to or more than 75% of the estimated economic life of the leased property, it will be classified as a finance leas If at the end of the lease termthe leased property has an alternative use to the lessor, this lease is classified as a finance lease
f the lessor meets any one of the five Group I criteria, then the lessor classifies the lease as a(n) ________. If the lessor meets both of the Group II criteria, but none of the Group I criteria, then the lessor classifies the lease as a(n) ________. If the transaction does not meet either the Group I or Group II criteria, then the lessor classifies the lease as a(n) ________. Group of answer choices operating lease; direct financing lease; sales-type lease direct financing lease; operating lease; sales-type lease sales-type lease; direct financing lease; operating lease standalone price lease; sales-type lease; direct financing lease
The situation which would normally lead to a lease being classified as afinance lease include all of the following, except A. The lease transfers ownership of the underlying asset to the lessee at the end of the lease term. B. The lessee has the option to purchase the asset at a price which is expected to be sufficiently higher than the fair value at the date the option becomes exercisable. C. The lease term is for the major part of the economic life of the underlying asset even if title is not transferred. D. The present value of the lease payments amounts to substantially all of the fair value of the underlying asset at the inception of the lease.
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.
For a lease that transfers ownership of the property to the lessee by the end of the lease term, the lessee should: a.amortize the right-of-use asset over the economic life of the asset in a manner consistent with the lessee's normal depreciation policy for owned assets b.amortize the right-of-use asset over the lease term in a manner consistent with the lessee's normal depreciation policy for owned assets c.record each lease payment as lease expense d.combine interest expense and amortization expense and report as a single lease expense