Security deposits, which are refundable to the lessee upon lease termination, are treated as prepaid rent by lessees and as unearned income by lessors. а. b. are never discounted. are treated as receivable by lessees and as payable by lessors. d. are discounted only by lessees but not by lessors С.

Security deposits, which are refundable to the lessee upon lease termination, are treated as prepaid rent by lessees and as unearned income by lessors. а. b. are never discounted. are treated as receivable by lessees and as payable by lessors. d. are discounted only by lessees but not by lessors С.

Financial Accounting Intro Concepts Meth/Uses

14th Edition

ISBN:9781285595047

Author:Weil

Publisher:Weil

Chapter11: Notes, Bonds, And Leases

Section: Chapter Questions

Problem 11Q

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Similar questions

When a lessee makes periodic cash payments for a finance lease, which of the following accounts is decreased? A.Right-of-Use Asset B.Lease Rental Expense C.Interest Expense D.Lease Liability
One of the following statements is false: a. If the underlying asset will not revert to the lessor, the residual value is simply ignored by the lessor in the computation of unearned interest income and gross profit on the sale. b. The underlying asset will remain with the lessee if the lease provides for either a purchase option that is reasonably to be exercised or transfer of title to the lessee upon the lease expiration. c. When a lessor actually sells an asset that it has been leasing, the difference between the sales price and the carrying amount of the lease receivable is recognized in profit or loss. d. The gain or loss that pertains to the right retained by the seller-lessee in a sales and leaseback transaction is not recognized.
What is the correct treatment of advance payment made by the lessee to the lessor? A. None of the above B. If the advance payment representing loan is intended to be applied to unpaid rent, the amount is part of the debtor/lessor’s taxable income at the time of receipt of said amount. C. If the advance payment represents security deposit, the amount is part of the lessor’s taxable income. D. If the advance payment represents loan, the amount is part of the lessor’s taxable income.
Which of the following statements are false under a sale a leaseback transaction? I. If a sale and leaseback transactions results in a finance lease, any excess of proceeds over the carrying amount shall not be immediately recognized as income by a seller-lessee. Instead, it shall be deferred and amortized over the lease term. II. If the sale price is established at fair value under an operating lease, any gain or loss shall be deferred and amortized over the period which the asset is expected to be used. I only II ONLY BOTH I AND II NEITHER I OR II
Describe and demonstrate how the lessee accounts for a finance lease and the lessor accounts for a sales-type lease with no selling profit.
Lease bonus is recognized by the lessor as a liability amortized over the lease term. * True or False?
True or False Lease payments are paid by the lessor.
Which of the following statements is correct regarding the accounting for leases? The lessee depreciates the leased asset under a “short-term” or a “low-valued asset” lease The lessor depreciates the leased asset under a finance lease An entity can never be both a lessor and a lessee of a same leased asset When discounting lease payments both the lessor and the lessee use the interest rate implicit in the lease, unless the lessee cannot determine this rate
Which is not an advantage of leasing from a lessee's viewpoint? A.The asset can be acquired without having to make a substantial down payment. B. Leased assets are never reported on the balance sheet. C. The risk of obsolescence may be reduced. D. A lease may provide 100% financing.
When a lessor receives cash on an operating lease, which of the following accounts is increased? A. Lease Payable B. Interest Revenue: Leases C. Lease Receivable D. Rent Revenue
Lease bonus is recognized by the lessor as a liability amortized over the lease term. a. TRUE b. FALSE
(a) Cite an example of a contract which is contrary to morals, (b) Can the nullity of the stipulation on the usurious interest affect (i) the lender’s rights to recover the principal loan; (ii) the terms of the real estate mortgage?