What are the primary benefits to a lessor of entering into a lease arrangement

Q: What is a purchase option? How does it affect accounting for a lease?

A: Purchase option : A purchase option is an agreement that gives the lessee a choice to purchase the…

Q: Describe the effect of a “bargain-purchase option” onaccounting for a capital lease transaction by a…

A:

Q: List the sequence of events for the lessee that leads to a lease arrangement.

A: The legal agreement where there are two parties, one party convinces his property to another party…

Q: Describe the accounting procedures that must be followed by a lessee when employing the operational…

A: The Question is about the accounting procedures that must be followed by a lessee when employing the…

Q: True or False   Lease payments are paid by the lessor.

A: Lessor is the legal owner of the property.Lessor leases the property he owns to lessee for rental…

Q: What is the primary objective of the required lease disclosures for the lessor and lessee?

A:

Q: In a Type A lease, “front loading” of lease expense and lease revenue occurs. What does this mean,…

A: Lease:An agreement of contract that is made to transfer the right to utlize the resources for a…

Q: What is a “per procedure” lease and how does it differ from a standard lease?

A: A lease is the written agreement between the two parties in which one transfers the asset to the…

Q: what is the value of the lease?

A: Value of Perpetual annuity = PMT/r PMT is the monthly payment r is the monthly compounded rate.…

Q: Explain when and how a lessee accounts for a lease by the shortcut method.

A: The shortcut method is when the lessee and the lessor don't account for the lease at its…

Q: What do you think is the main difference of accounting for lease on the part of the lessee and…

A: Lease is regarded as the contract between two parties those to use the asset of the owner by another…

Q: Why the lease is considered a “short-term lease”?

A: Lease:   It is an agreement between an owner of an asset (Lessor) and a tenant (lessee) where the…

Q: At the beginning of a Type B lease, the lessor will record what asset and liability, if any?

A: Lease:An agreement of contract that is made to transfer the right to utlize the resources for a…

Q: What is the difference between a tax-oriented lease and a nontax-oriented lease?

A: A tax-oriented lease: A tax-oriented lease, occasionally named a true lease, which offer the lessor…

Q: A lessor will record interest income if a lease is classifi ed as:A . a capital lease.B . an…

A: Introduction: Leasing is a mechanism by which the company may receive certain capital assets for…

Q: Does a lessee have an option not to separate lease and non lease components?

A: Lease: A lease or a lease agreement is a binding contract between two parties that dictates…

Q: Explain the nature, economic substance, and advantages of lease transactions.

A: Lease:   It is an agreement between two parties where the one party agrees to rent an asset owned by…

Q: Who are the two parties to a lease transaction?

A: Lease: Leases are agreements in which the proprietor of the asset permits another party to utilize…

Q: When should a lessor recognize in income a nonrefundable lease bonus paid by a lessee on signing an…

A: A non-refundable lease bonus paid by a lessee on signing an operating lease is treated as deferred…

Q: From a lessee perspective, distinguish between a finance lease and an operating lease.

A: Lessees have available two lease accounting methods: (a) the operating method and (b) the…

Q: The appropriate valuation of an operating lease in the balance sheet of the lessee is? right of use…

A: The appropriate valuation of an operating lease in the balance sheet of the lessee is Nil.... Only…

Q: Lease bonus is recognized by the lessor as a liability amortized over the lease term. * True or…

A: Introduction:- A lease defined as where one party provide or gives right to use a property to…

Q: What is difference between lease method and installment method?

A: Lease:   It is an agreement between an owner of an asset (Lessor) and a tenant (lessee) where the…

Q: Is there a need to amortize deferred rent income/unearned rent income in an operating lease?

A: There are two type of lease which are, (1) Operating lease  (2) Finance lease In operating lease,…

Q: In accounting for a Type B lease, how are the lessee’s and lessor’s income statements affected?

A: When accounting for finance lease/ Sales type lease, lease payments are made during the term of…

Q: A lessee should classify a lease transaction as a capital lease if it is noncancelable and one or…

A: Explain the criteria for defining the lease as capital lease or operating lease: As per the notes…

Q: What are the disadvantages of lease?

A: Lease:   Lease is a contractual agreement whereby the right to use an asset for a particular…

Q: At the beginning of a Type B lease, the lessee will record what asset and liability, if any?

A: Type B lease implies to the lease in which insignificant portion of the useful life of the asset is…

Q: In a financing lease, “front loading” of lease expense and lease revenue occurs. What does this…

A: Finance lease: Finance lease is a parallel type of direct financing whereby the owner (lessor)…

Q: The basic concept of “substance over form” influence lease accounting. Explain in detail how it does…

A: Substance over form is an accounting concept that business transactions should be accounted in…

Q: What disclosures should be made by lessees and lessors related to future lease payments?

A: Lease: Lease is a contractual agreement whereby the right to use an asset for a particular period of…

Q: Outline the accounting processes that must be followed by a lessee when using the operational lease…

A: The question deals with the accounting processes that must be followed by a lessee when using the…

Q: What is the difference between an operating lease and a financial,or capital, lease?

A: Lease: Leases are agreements in which the proprietor of the asset permits another party to utilize…

Q: What are the ways in which the accounting for the lease is affected?

A: Leases are a special item in accounting. There are mainly 2 types of lease: 1. Operating and 2.…

Q: What are the required lease disclosures for the lessor and lessee?

A: Lease: Lease is a contractual agreement whereby the right to use an asset for a particular period of…

Q: What factors would tend to affect the value of a lease?

A: Lease is a contract between two parties in which one party lends its property or asset to the other…

Q: Explain the accounting involved in applying the operating lease method by a lessor.

A: Operational lease method: A process of using the asset for a rental payable in instalments or in…

Q: What is the main purpose of the lease disclosures required of the lessor and lessee?

A: The Answer:

Q: How do the lessee and lessor will agree to modify the terms of a lease before the lease term ends?

A: Lease Agreement:   It is a contract between the owner of an asset (lessor) and a tenant (lessee) for…

Q: What is the initial lease liability?

A: 1. Initial lease liability: Annual rental payable at the end of each year* Present value of an…

Q: Distinguish between a financing lease and an operational lease from the lessee's standpoint.

A: Financial lease is the arrangement where lessor provides lessee, a asset to use for the major period…

Q: What is a short-term lease? Describe lessee accounting for a short-term lease.

A: Short-term LeaseThis is a type of leasing which has a maximum lease term ranging from 1 year or…

Q: c) A lessor expects some benefits from a lease contract. Explain some benefits.

A: A lease agreement is a legal contract between two parties for the usage of an asset or property over…