Under a sales-type lease without an operating profit, how is the lessor's cost (1.e., the initial Lease Receivable account) computed: a. When there is no bargain purchase option or residual value? b. When there is a bargain purchase option? c. When there is no bargain purchase option but there is a guaranteed residual value? d. When there is no bargain purchase option but there is an unguaranteed residual value? e. Which discount rate does the lessor use in computing the lessor's cost (lease receivable) the lessor's implicit rate or the lessee's incremental borrowing rate? Why? Any exceptions?
Under a sales-type lease without an operating profit, how is the lessor's cost (1.e., the initial Lease Receivable account) computed: a. When there is no bargain purchase option or residual value? b. When there is a bargain purchase option? c. When there is no bargain purchase option but there is a guaranteed residual value? d. When there is no bargain purchase option but there is an unguaranteed residual value? e. Which discount rate does the lessor use in computing the lessor's cost (lease receivable) the lessor's implicit rate or the lessee's incremental borrowing rate? Why? Any exceptions?
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 13GI: What is the basic difference between the accounting procedures used by a lessor for a sales-type...
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