The lessee recognizes a loss on finance lease when the fair value of the leased asset is _______ than the _________ residual value.
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A:
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Q: The lessor recognizes a loss on finance lease when the fair value of the leased asset is _______…
A: Correct option is A. Lower; guaranteed Explanation:
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Q: he lessor recognizes a loss on finance lease when the fair value of the leased asset is _______ than…
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A: Answer: The given statement is True.
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- Use the following information to decide whether this equipment lease qualifies as an operating, sales-type, or direct financing lease to a lessor. a. There is no transfer of ownership at the end of the lease term. There is no bargain purchase option. The lease term is 60% of the economic life of the leased property. The present value of lease payments, including a residual value guaranteed by the lessee, is 100% of the fair value of the leased property to the lessor. The collectability of the lease payments is reasonably assured. The leased asset was not of a specialized nature. b. Same as (a), except that the residual value is guaranteed by a third party, not the lessee. The present value of the residual value guarantee is 15% of the fair value of the leased property. c. Same as (a), except that: the present value of the lease payments, including a residual value guaranteed by the lessee, is only 50% of the fair value of the leased asset. The collectability of the minimum lease payments is not predictable.The lessor recognizes a loss on finance lease when the fair value of the leased asset is _______ than the _________ residual value. A)higher; guaranteed B)lower; guaranteed C)lower; unguaranteed D)higher; unguaranteedThe lessor recognizes a loss on finance lease when the fair value of the leased asset is _______ than the _________ residual value. lower; guaranteed lower; unguaranteed higher; guaranteed higher; unguaranteed
- If the gains or losses from the fluctuation in the fair value of the residualaccrue to the lessor, the lease can be classified as a finance lease. Question: True or FalseIn calculating the amortization of a leased asset, the lessee should subtract a Select one: a. guaranteed residual value and amortize over the term of the lease. b. unguaranteed residual value and amortize over the term of the lease. c. guaranteed residual value and amortize over the life of the asset. d. unguaranteed residual value and amortize over the life of the asset. e. None of the above.The residual value is the estimated fair value of theleased property at the end of the lease term.(a) Of what significance is (1) an unguaranteed and (2) aguaranteed residual value in the lessee’s accountingfor a capitalized-lease transaction?(b) Of what significance is (1) an unguaranteed and (2) aguaranteed residual value in the lessor’s accountingfor a direct-financing lease transaction?
- On the balance sheet, the right-of-use asset under an operating lease is ________. Group of answer choices not included reduced to present value amortized later than with a finance lease amortized by straight lineWhich of the following should be included by the lessee in determining the amount of the right-to-use asset and lease liability: a. Fixed Payments: Yes/Unguaranteed Residual Value: Nob. Fixed Payments: Yes/Unguaranteed Residual Value: Yesc. Fixed Payments: No/Unguaranteed Residual Value: Yesd. Fixed Payments: No/Unguaranteed Residual Value: NoGuaranteed residual value is a fixed amount required by the lessor at the termination of the lease only in the absence of a purchase option. *TRUE or FALSE
- For a lessor, the leased asset appears on the balance sheet and continues to be depreciatedwhen the lease is classifi ed as:A . a sales-type lease.B . an operating lease.C . a fi nancing lease.Occasionally, a lease agreement includes a guarantee by the lessee that the lessor will recover a specified residual value when custody of the asset reverts back to the lessor at the end of the lease term. Under what circumstance can the guaranteed residual value influence the amounts recorded by the lessee and lessor? In that circumstance, how are the amounts affected?Which of the following statements regarding the calculation of the lessee's amortization expense for a finance lease is true? A. The guaranteed residual value is included in the measurement of the right-of-use asset to be amortized only to the extent that is likely to be owed. B. The guaranteed residual value is not included in the measurement of the right-of-use asset to be amortized. C. The unguaranteed residual value is included in the measurement of the right-of-use asset to be amortized. D. The bargain purchase option price is never included in the measurement of the right-of-use asset to be amortized.
