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Asked Jan 25, 2020
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Metheny Corporation's lease arrangements qualify as sales-type leases at the time of entering into the transactions. How should the corporation recognize sales revenue and cost of goods sold in these situations?

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Sale type leasing: An agreement created between the lessor and the lessee for an amount higher than the cost of the asset leased is termed sale type lease. In this type of lease the amount payable for lease includes the profit which the lessor wishes to include. The agreement should end with the transfer of ownership and the lease tenur...

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