53 Lease bonus paid by the lessee in a short-term lease must be accounted by *recognizing the lease bonus as rent expense when paidrecognizing the lease bonus as rent expense over the term of the leaserecognizing the lease bonus as rent expense at the end of the lease termrecognizing the lease bonus as rent expense over the term of the lease using the effective interestmethod

Lease bonus paid by the lessee in a short-term lease must be accounted by * O recognizing the lease bonus as rent expense when paid O recognizing the lease bonus as rent expense over the term of the lease O recognizing the lease bonus as rent expense at the end of the lease term recognizing the lease bonus as rent expense over the term of the lease using the effective interest

Lease bonus paid by the lessee in a short-term lease must be accounted by * O recognizing the lease bonus as rent expense when paid O recognizing the lease bonus as rent expense over the term of the lease O recognizing the lease bonus as rent expense at the end of the lease term recognizing the lease bonus as rent expense over the term of the lease using the effective interest

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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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
A lease agreement whereby the lessee recognized rent expense which is always equals to the rent income recognized by the lessor at a given period of time. A. Operating lease B. Finance lease C Terminating lease D. Sale type lease
The rent expense of the lessee maybe composed of the following:I. Straight-line amortization of total rental payments over the lease term plus any free rent.II. Straight-line amortization of lease bonus paid by the lessee at inception of the lease.III. Any contingent rent accrued to the lessor as part of lease agreement. I and III only I and II only II and III only I, II, and III
The rent expense of the lessee maybe composed of the following:I. Straight-line amortization of total rental payments over the lease term plus any free rent.II. Straight-line amortization of lease bonus paid by the lessee at inception of the lease.III. Any contingent rent accrued to the lessor as part of lease agreement. A. I and III only B. I, II, and III C. II and III only D. I and II only
A lease agreement whereby the lessee recognized rent expense which is always equal to the rent income recognized by the lessor at a given period of time. Group of answer choices Terminating lease Operating lease Finance lease Sale type lease
The rent expense of the lessee maybe composed of the following:I. Straight-line amortization of total rental payments over the lease term plus any free rent.II. Straight-line amortization of lease bonus paid by the lessee at inception of the lease.III. Any contingent rent accrued to the lessor as part of lease agreement. Group of answer choices I and III only II and III only I and II only I, II, and III
An amount paid by the lessee to the lessor in addition to the periodic rental which is treated by the lessor as an unearned rent income to be amortized over the lease term. a. Contingent rent b. Lease bonus c. Initial direct cost d. Security deposit
When should a lessor recognize in income a nonrefundable lease bonus paid by a lessee on signing an operating lease? A. Over the lease term B. At the inception of the lease C. When received D. At the lease expiration
When should a lessor recognize as income a nonrefundable lease bonus paid by a lessee on signing an operating lease? at the inception of the lease over the lease term at the lease expiration when received
Each period of a finance lease, the lessee records a lease expense that includes which of the following? Group of answer choices Interest expense on the lease liability, using the effective interest rate method and the discount rate it used to compute the present value of the liability at the lease commencement date; variable lease payments not included in the lease liability in the period in which the obligation for the variable payments is incurred; and changes in variable lease payments that depend on an index or rate. Neither A nor B is correct. Interest expense on the lease liability, using the effective interest rate method and the discount rate it used to compute the present value of the liability at the lease commencement date; variable lease payments not included in the lease liability in the period in which the obligation for the variable payments is incurred. Both A & B are correct.
Rent received in advance by the lessor for an operating lease should berecognized as revenue a. when receivedb. at the lease's inceptionc. over the lease termd. at the lease's expiration
A lease might specify that lease payments may be increased (or decreased) at some future time during the lease term depending on whether or not some specified event occurs such as revenues or profits exceeding some designated level. Under what circumstances are contingent rentals included or excluded from lease payments? If excluded, how are they recognized in income determination?