Which of the following are normal characteristics of a financial lease? I. Maintenance of the leased asset is the responsibility of the lessee. II. The lease is generally cancellable by the lessee prior to the expiration date. II. Financial leases are generally fully amortized. IV. The lessee usually has the right to renew the lease at the end of the initial lease period.
Q: Lessors are required to account for lease receipts from operating leases as A. revenue, on a…
A: An operating lease is a contract that permits the use of an asset without transferring the ownership…
Q: 3. Which of the following is true in regards to the reassessment of the lease term? A. If the lessee…
A: Lease term is the time period agreed by the lessee and the lessor for which the asset shall be…
Q: Which of the following is not a criterion for a lease to be recorded as a finance lease?(a) There is…
A: Definition: Lease: Lease is a contractual agreement whereby the right to use an asset for a…
Q: The situation which would normally lead to a lease being classified as a finance lease include all…
A: Lease contract can be defined as an agreement between two parties, lessor and lessee. It is contract…
Q: If the lease in a sale-leaseback transaction meets one of the five lease tests and is therefore…
A: The leaseback agreement includes the details regarding the lease duration, lease payment, etc.'
Q: Explain when and how a lessee accounts for a lease by the short-cut method.
A: The shortcut method is when the lessee and the lessor don't account for the lease at its…
Q: A lessor with a sales-type lease involving an unguaranteed residual value at the end of the lease…
A: A contract under which lessee gets the right to use an asset by the lessor and pays him…
Q: A lease might specify that lease payments may be increased (or decreased) at some future time during…
A:
Q: Lease payments are payments made by a lessee to a lessor relating to the right to use an underlying…
A: The standard states that lease payments for the lessee includes the following a.) Exercise price of…
Q: A lessee with a lease containing a bargain purchase option should depreciate the leased asset over…
A: A lesseewith an lease containing a bargain purchase option should depreciate the leased asset over…
Q: When a lease modification results in partial termination of a lease, the change shall be accounted…
A: Answer is option D) The increase (decrease) in lease liability as a result of the lease modification…
Q: Which of the following statements is characteristic of leases? a.If a lease is classified as an…
A: LEASES ARE CONTRACT IN WHICH PROPERTY OR THE ASSET OWNER ALLOWS ANOTHER PERSON TO USE THE PROPERTY…
Q: Which of the following statements is correct in accordance with AASB 16 Leases? Group of answer…
A: The question is related to Accounting for Lease.
Q: In a lease that is recorded as a manufacturer's lease or dealer's lease by the lessor, interest…
A: A manufacturer/dealer lessor is a lessor that either manufactures the leased asset or acquires the…
Q: Which of the following is most likely a lessee’s disclosure about operating leases?A . Lease…
A: Operating lease: In operating lease ownership cannot be transferred.
Q: For which of the following conditions will the lessor classify a lease as a sales-type lease? A.…
A: Lease classify as sale type lease means it is a financial lease where lessor has given right to use…
Q: his type of lease involves recognition of a manufacturer’s or dealer’s profit or loss on the…
A: Step 1 In a sales-type lease, the lesser is assumed to be selling a product to the lessee, which…
Q: At the beginning of an operating lease, the lessee will record what asset and liability, if any?
A: During the lease period if ownership of the asset is not transferred to Lessee. Lessee has only…
Q: Which of the following is incorrect regarding the accounting for leases by a lessee?
A: Lease is a type of contract which is established when one party does not have sufficient means or…
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: Rent received in advance by the lessor for an operating lease should berecognized as revenue a. when…
A: Lease is an agreement between two parties in which one party that is Lessor provides its asset for…
Q: Which of the following items would not be included in the calculation of the lease liability for a…
A: Finance lease is the lease where lessee has operation control as well as share of economic risk and…
Q: In relation to a short-term operating lease, which of the following statements is NOT correct? a.…
A: A short-term operating lease is a short-term lease agreement under which the lessor rents the asset…
Q: When a lease qualifies as a finance lease, what amount is initially recorded as the cost of the…
A: Solution Concept In case of finance lease , The initial cost of right of use asset include…
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: Which one of the following would normally lead to a lease being classified as an operating lease?…
A: Solution: "At the inception date of the lease agreement, the present value of the total lease…
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: Under a direct financing lease, the excess of aggregate rentals over the cost of the leased property…
A: Lease refers to the contract that outline the terms where one party of the contract agrees to rent…
Q: Which of the following statements characterizes a sales-type lease? A)The lessor recognizes only…
A: SOLUTION- SALES TYPE LEASE IS A FINANCE LEASE IN WHICH THE FAIR MARKET VALUE (OR IF LOWER , THE PV…
Q: Which of the following statements is correct regarding the accounting for leases? The lessee…
A: SOLUTION A LEASE IS A CONTRACT OUTLINING TERMS UNDER WHICH ONE PARTY AGREES TO RENT AN ASSET - IN…
Q: The lessee normally measures the lease liability to be recorded as the: Select one: a. Present…
A: Lease: Lease is a contractual agreement whereby the right to use an asset for a particular period of…
Q: Explain which of following would result in the lessee classifying the lease as a finance lease. a.…
A: lease agreement refers to an agreement in which a contract is made to get the asset on lease. The…
Q: At the beginning of an operating lease, the lessor will record what asset or assets, if any?
A: An operating lease is a contract that allows for the use of an asset but does not convey ownership…
Q: ow will a 20-year lease obligation appear on the lessee's statement of financial position? a.as a…
A: Financial lease is that lease where lessor has given right to use the assets to lessee which cover…
Q: A lease agreement whereby the lessor shall recognized gross profit at inception of the lease
A: A lease agreement whereby the lessor shall recognized gross profit at inception of the lease is…
Q: The objective of IAS 17 Leases is to prescribe the appropriate accounting treatment and required…
A: When a lease is classified as a finance lease, the lessee must account for both an asset and a…
Q: Among the four types of leases: Lessor’s sales-type lease, Lessor’s operating lease Lessee’s…
A: A) Lessor's sales-type lease - Lessor will record the Lease receivable i.e. lease asset on the…
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: statements is correct related to lease
A: Option "a" and "b" are incorrect because it deals with depreciation of leased asset, not lease.…
Q: When a sale-leaseback transaction occurs, if the leaseback is considered to be an operating lease,…
A:
Q: Which of the following is true regarding IFRS 16? a. Lessors shall recognize assets held under…
A: As per IFRS16, Leases Lessor will account lease as operating lease or finance lease.
Q: On the lessor’s accounting, which of the following situations would prima facie lead to a lease…
A: Solution: On the lessor’s accounting, following situations would prima facie leas to a lease…
Q: Which of the following statements is false regarding the accounting for leases? The amount of lease…
A: A lease rental collected in Advance is treated as Rent Advance and is included in the Non current…
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- At its inception, the lease term of Lease G is 65% of the estimated remaining economic life of the leased property. This lease contains a purchase option that is reasonably expected to be exercised. The lessee should record Lease G as: a. neither an asset nor a liability b. an asset but not a liability c. an expense d. an asset and a liabilityWhat is the basic difference between the accounting procedures used by a lessor for a sales-type lease and those used for a direct-financing lease?Which one of the following would normally lead to a lease being classified as an operating lease? a. The lease term is for a period of more than half of the expected economic life of the underlying asset. b. At the inception date of the lease agreement, the present value of the total lease payments is for an amount substantially less than the fair value of the underlying asset. c. The lease is cancellable, and all losses associated with the cancellation will be incurred by the lessee. d. It is reasonably certain at the inception date that the lessee will exercise an option to purchase the underlying asset at the end of the lease term for a price substantially lower than its expected fair value.
- Which of the following is a criterion for classifying a lease for a lessee as a finance lease? The lease term is for a major part of the asset’s economic life. The lease transfers ownership of the asset to the lessee at the end of the lease term. The present value of the lease payments equals or exceeds substantially the asset’s fair value. All of the above.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 termWhich of the following is NOT a correct statement of one of the lease classification test for the lessee? If the lease transfers ownership of the property to the lessee, it will be classified as a finance lease If the lease contains a bargain purchase option, it will be classified as a finance lease If the lease term is equal to or more than 75% of the estimated economic life of the leased property, it will be classified as a finance leas If at the end of the lease termthe leased property has an alternative use to the lessor, this lease is classified as a finance lease
- Initially, a lease liability is measured a. by the lessee at the present value of the lease payments that are not paid at the commencement date of the lease. b. by the lessor at the present value of the total lease payments payable at the commencement date of the lease. c. by the lessor at the total cost of the right-of-use asset. d. by the lessee at the total cost of the right-of-use asset.A lease agreement will qualify as a finance lease if one of these conditionsoccur: A. The lessee returns the leased property to the lessor at the end of the lease term.B. The lease does not have a bargain purchase option.C. The lease term is for major of the economic life of the asset.D. The present value of the minimum lease payment amounts to substantially less than the fair value of the leased asset.The lessee normally measures the lease liability to be recorded as the: Select one: a. Present value of the minimum lease payments. b. The future value of the minimum lease payments c. The fair market value of the leased asset. d. The sum of the cash payments over the term of the lease.
- The situation which would normally lead to a lease being classified as afinance lease include all of the following, except A. The lease transfers ownership of the underlying asset to the lessee at the end of the lease term. B. The lessee has the option to purchase the asset at a price which is expected to be sufficiently higher than the fair value at the date the option becomes exercisable. C. The lease term is for the major part of the economic life of the underlying asset even if title is not transferred. D. The present value of the lease payments amounts to substantially all of the fair value of the underlying asset at the inception of the lease.A lease is classified as financial because it meets the criteria that the term of the lease is more than 75% of the life of the leased asset. For how long should that asset be amortized? A) The term of the lease B) An average of the useful life and term of the lease C) It is not amortized because it is not the owner D) The useful life.When should a lessor recognize as income a nonrefundable lease bonus paid by a lessee on signing an operating lease? at the inception of the lease over the lease term at the lease expiration when received