In accounting for a finance lease/sales-type lease, how are the lessee’s and lessor’s income statements affected?

Q: Discuss how the lease liability would be measured at lease inception.

A: Lease Liability is the present value of the financial obligation of the lease for the lease…

Q: Describe how a "bargain buy option" affects the lessee's accounting for a finance lease deal.

A: HERE IS THE ANSWER:

Q: What are some important lease provisions which investors should be aware of when analyzing the…

A: An investment becomes a real estate investment trust (REIT) when it satisfies certain provisions.…

Q: Outline the accounting procedures involved in applyingthe capital lease method by a lessee.

A:

Q: True or False   Lease payments are paid by the lessor.

A: Lessor is the legal owner of the property.Lessor leases the property he owns to lessee for rental…

Q: Describe the accounting and reporting for special features of lease arrangements.

A: Special features of lease arrangements: - Residual type - Sale type leases - Bargain purchase option…

Q: What payments are included in the lease liability?

A: Lease agreement refers to an agreement in which a contract is made to get the asset on lease. The…

Q: What is a “per procedure” lease and how does it differ from a standard lease?

A: A lease is the written agreement between the two parties in which one transfers the asset to the…

Q: Why is it appropriate to compare the cost of lease financing with that of debtfinancing?

A: Cost of lease financing is the cost that is bear by the lessee who have owned the right from the…

Q: What do you think is the main difference of accounting for lease on the part of the lessee and…

A: Lease is regarded as the contract between two parties those to use the asset of the owner by another…

Q: Where can we obtain reliable guidelines on IFRS lease accounting?

A: It is dealing with where can we obtain reliable guidelines on IFRS lease accounting

Q: Describe the effect on the lessee of a “bargain purchase option” on accounting for a finance lease…

A: Lease agreement refers to an agreement in which a contract is made to get the asset on lease. The…

Q: accounting processes necessary for a lessee to use the operating lease technique.

A: Operating lease refers to the lease or contract which allows the asset use and it does not convey…

Q: When can a lease create both an asset and a liability for the lessee?

A: Lease is an agreement between two persons in which one grants the right to another to use a…

Q: Explain the difference in lessor income statement presentation for a sales-type versus operating…

A: Lease: Lease is a contractual agreement whereby the right to use an asset for a particular period of…

Q: From a lessee perspective, distinguish between a finance lease and an operating lease.

A: Lessees have available two lease accounting methods: (a) the operating method and (b) the…

Q: Identify possible adverse effects on a lessee entity’s financial statements arising from the…

A: Lease accounting is the process of recording the lease activities to show the financial impact of…

Q: The basic concept of “substance over form” influences lease accounting. Explain

A: Lease:   Lease is a contractual agreement whereby the right to use an asset for a particular period…

Q: What is difference between lease method and installment method?

A: Lease:   It is an agreement between an owner of an asset (Lessor) and a tenant (lessee) where the…

Q: The term of a finance lease includes the initial lease term and any bargain renewal terms.    True…

A: The answer for the True or false question is discussed hereunder : What is a finance lease?  Finance…

Q: Identify the lease classifications for lessors and the criteria that must be met for each…

A: Lease: A contractual agreement for an asset between two parties. The parties involved are lessee and…

Q: Describe the accounting for leases by lessors.

A: There are mainly 2 types of lease:   1. Finance and 2. Operating    Finance lease is a lease where…

Q: Explain Nonlease Components of Lease Payments.

A: Lease:   Lease is a contractual agreement whereby the right to use an asset for a particular period…

Q: Why do we need to differentiate lessor accounting for direct financing lease and sales-type lease?

A: Lease contract: Lease contract is an arrangement occurs between two individuals or entities through…

Q: What are the primary benefits to a lessor of entering into a lease arrangement

A: The primary benefits to a lessor of entering into a lease arrangement will be explained:

Q: The discount rate influences virtually every amount reported in connection with a lease by both the…

A: The lessor’s discount rate is the effective interest rate when determining the present value of…

Q: Describe the accounting procedures involved in applying the finance lease method by a lessee.

A: A lease is a written agrfgdhdfA lease is a written agreement that indicating the conditions within…

Q: Explain the distinction between a direct-financing leaseand a sales-type lease for a lessor.

A:

Q: Explain the difference in lessee income statement and balance sheet presentation for a finance…

A: Lease agreement refers to an agreement in which a contract is made to get the asset on lease. The…

Q: Which of the following statements is true about lease accounting methods? (check all that apply)

A: A capital lease is nothing but a contract entitling to renter for the temporary use of an asset, and…

Q: Compare the way a bargain purchase option and a residual value are treated by the lessee when…

A:

Q: How is interest determined in a capital lease transaction? How does the approach compare to other…

A:

Q: What is the composition of lease Payments?

A: Lease is a kind of monthly rental payment made by the lessee to the lessor in return of the right to…

Q: The basic concept of “substance over form” influence lease accounting. Explain in detail how it does…

A: Substance over form is an accounting concept that business transactions should be accounted in…

Q: What disclosures should be made by lessees and lessors related to future lease payments?

A: Lease: Lease is a contractual agreement whereby the right to use an asset for a particular period of…

Q: Describe the accounting for leases by lessees.

A: Finance lease is a lease where all the risks and the rewards are transferred from the lessor to the…

Q: The appropriate asset value reported in the balance sheet by the lessee for an operating lease is:

A: GIVEN   The appropriate asset value reported in the balance sheet by the lessee for an operating…

Q: What is the difference between an operating lease and a financial,or capital, lease?

A: Lease: Leases are agreements in which the proprietor of the asset permits another party to utilize…

Q: What are the required lease disclosures for the lessor and lessee?

A: Lease: Lease is a contractual agreement whereby the right to use an asset for a particular period of…

Q: In accounting for an operating lease, how are the lessee’s and lessor’s income statements affected?

A: Lease:   Lease is a contractual agreement whereby the right to use an asset for a particular period…

Q: Compare the way a purchase option that is reasonably certain to be exercised and a lessee-guaranteed…

A: Definition:   Lease: Lease is a contractual agreement whereby the right to use an asset for a…

Q: Describe the lessor's accounting for a direct financing lease.

A: Direct finance leasing: An agreement created between the nonmanufacturer and a lessee who use the…

Q: Describe and demonstrate how the lessor accounts for a sales-type lease with a selling profit.

A: In a sales-type lease, the lessor is assumed to actually be selling a product to the lessee, which…

Q: How do the lessee and lessor will agree to modify the terms of a lease before the lease term ends?

A: Lease Agreement:   It is a contract between the owner of an asset (lessor) and a tenant (lessee) for…

Q: Compare and contrast a finance lease with an operating lease.

A: Lease:   It is an agreement between two parties where the one party agrees to rent an asset owned by…

Q: What difference is between operating lease and finance leasing?

A: A lease is a financial agreement between two parties, i.e., lessor and lessee. A lessor is a person…

Q: Distinguish between a financing lease and an operational lease from the lessee's standpoint.

A: Financial lease is the arrangement where lessor provides lessee, a asset to use for the major period…

Q: Where does the operating lease liability reported?

A: Operating lease: This type of lease refers to the lease where the lessor permits the lessee to make…

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.