1) If a lease does not qualify as an operating lease, how will a lessee classify the lease? (I.O Short TermO CapitalO Sales-TypeO Financing1

A lease is a contractual agreement between two parties, the lessor (owner) and the lessee (user),…

Answered: ) If a lease does not qualify as an…

) If a lease does not qualify as an operating lease, how will a lessee classify the lease? (1. Short Term O Capital Sales-Type Financing

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 8GI

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Concept explainers

Leasing

Leasing is a contractual arrangement in which someone (a lessee) pays the owner (or lessor) of a building, land, vehicle, or other asset for the use of that asset. The lease is the agreement between lessee and lessor.

Question

1
) If a lease does not qualify as an operating lease, how will a lessee classify the lease? (I.
O Short Term
O Capital
O Sales-Type
O Financing
1

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Which of the following does not affect the computation of the rental income/expense under an operating lease? Contingent rent Lease bonus Security deposits Rental payments
See attached picture A) What is the theoretical basis for the accounting standard that requires certain long-term leases to be capitalized by the lessee? Do not discuss the specific criteria for classifying a specific lease as a capital lease.