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
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
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 9E: Lessor Accounting with Guaranteed Residual Value Use the information for Edom Company in E20-8,...
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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
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