Which of the following cash flows is classified as an investing cash flow? A. interest portion of payment received under a direct financing lease B. reduction of a direct financing lease receivable C. purchase of an asset leased under a sales-type lease D. payment received under an operating lease

Q: When a lessee makes periodic cash payments for a finance lease, which of the following accounts is…

A: PLEASE LIKE THE ANSWER, YOUR RESPONSE MATTERS    When a lessee makes periodic cash payments for a…

Q: We classify a lease as a finance lease if:   Multiple Choice   the present value of lease…

A: A lease is a written agreement that indicating the conditions within which a lesser acknowledges to…

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: Choose the correct statement below: A. Contingent liability is both probable and measurable. B. An…

A: The answer for the multiple choice question on choosing the correct statement and relevant…

Q: A lease that transfers substantially all the risks and rewards incidental to ownership of an…

A: A lease is normally called as finance lease if any of the following conditions are satisfied, The…

Q: True or false explain

A: A lease is a contractual agreement between the lessor and lessee. The owner is paid by the user…

Q: Evaluate the following statements: S1. Capitalization of borrowing cost is mandatory for a…

A: As per IAS 23 "Borrowing cost", all the borrowing cost related to acquisition or construction or…

Q: Which of the following is not one of the procedures for accounting by the lessee for a decrease in…

A: In the given case option A is correct... Both are required accounting procedures for the decrease in…

Q: How should the acquisition of a factory building by entering into a lease agreement be reported on…

A: Acquisition of a factory building is an investing activity Lease agreement is a financing activity.…

Q: A leased asset under capital lease is disclosed on the balance sheet at its O present value O…

A: Capital lease means a lease where lessor has given right to use the assets to lessee  which cover…

Q: Describe the impact of leases on the statement of cash flows and disclosurerequirements pertaining…

A: Lease is an agreement wherein lessor (owner of an asset) grants the right of its possession or use…

Q: Justify the effect of additional payments on lease accounting, such as non-lease payments, initial…

A: This question argues about the impact on lease accounting of non-lease payments, initial direct…

Q: Initial direct costs incurred by the lessor in connection with specific leasing activities as in…

A: Solution: Initial direct costs incurred by the lessor in connection with specific leasing activities…

Q: In an operating lease, rent collected in advance by the lessor should be treated as? prepaid…

A: Introduction: Operating lease: Under the operating lease the owner ship of the Asset does not…

Q: Identify possible adverse effects on a lessee entity’s financial statements arising from the…

A: Lease accounting is the process of recording the lease activities to show the financial impact of…

Q: Generally accepted accounting principles require that certain lease agreements be accounted for as…

A: Generally accepted accounting principles require that certain lease agreements be accounted for as…

Q: Differentiate and compare similarities of the two classification of lessor accounting for finance…

A: Solution Definition - Finance lease is when the financing institution holds the legal ownership of…

Q: Identify the CORRECT statement regarding the effect of lease on return on capital employed. Select…

A: Taking assets on lease is the best ways to save money which was supposed to be blocked if purchased…

Q: A(n) is a contract for the use of an asset for a period of time without having to buy the asset. Oa.…

A: lease: lease is a contract  to buy the right to use the asset for particular period of time on…

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: Which one of the following definitions is/are correct? I. A lease between a lessor and the…

A: 1) Incorrect: Direct lease is the lease between manufacture or dealer(which is lessor) and user…

Q: Under a 75% LTV term loan structure, when is the balance of funds released by the lender to the…

A: Borrowing to purchase an asset: An asset can be purchased by taking a loan from a financial…

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: initial direct costs incurred in relation to a lease transaction is added to A)the cost of sales…

A: In lease accounting the initial costs directly incurred in a lease transaction are to be considered…

Q: Requirements: 1. Prepare the necessary journal entries to record the above transactions assuming the…

A: Bonds: Bonds are the instruments issued by the business entity to raise capital through debt source.…

Q: d. What is the Year-1 imputed interest expense? Do not round intermediate calculations. Round your…

A: As Given  that (HPB) Company need a $80,000 compressed air. Although the compressor's economic…

Q: Which of the following is not one of the procedures for accounting by the lessee for a decrease in…

A: procedures for accounting by the lessee for a decrease in lease scope::: Decrease in the right of…

Q: . The capitalized costs of Right-of-use Asset includes the following I. Present value of the lease…

A: The right-of-use asset, also known as an ROU asset, seems to be a lessee's power using a leased…

Q: . In a lease that is not classified as a manufacturer's lease, initial direct cost is  a. added to…

A: Solution: As per accounting standards related to lease, Initial direct costs are often incurred in…

Q: The basic difference between a direct-financing lease and a sales-type lease is the recognition of…

A: A direct financing lease is a type of lease under which the lessor purchases the asset and lease it…

Q: Explain and evaluate the eff ects on financial statements and ratios of finance leases and operating…

A: In a lease contract there are two parties involve. One is the lessor who purchase the asset and…

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: In a sale and leaseback transaction, what is used by the buyer-lessor to depreciate the cost of the…

A: In a sale and leaseback transaction, what is used by the buyer-lessor to depreciate the cost of the…

Q: In a lease that is not assified as a manufacturer's ase, initial direct cost is * a. added to the…

A: Solution: In a lease that is not classified as a manufacturer's lease, initial direct cost is "added…

Q: TRUE OR FALSE: in a sales type lease the net investment in the lease is credited to the appropriate…

A: Lease is a financial transaction where one party, the lessor leases his asset to another party…

Q: Which of the following statements is/are not true? Interest expense on the lease liability will…

A: PFRS 16 talks about Recognition, Classification, Measurement and Disclosure of Leases in Financial…

Q: Which should be debited when depreciating a leased asset? a. Lease Liability b. Non-current Asset c.…

A: Answer-  d . Depreciation expense Depreciating a leased asset is similar to a purchased fixed asset…

Q: When a lessor receives cash on an operating lease, which of the following accounts is increased? A.…

A: Lease classify as sale type lease means it is a financial lease where lessor has given right to use…

Q: .The initial direct costs of leasing * , O All of these answers are true with regard to the initial…

A: Initial direct cost of leasing:- It is the cost which is generally incurred by the lessor in…

Q: Net investment in a sales-type lease is equal to

A: Net investment in sales type lease is recognized by lessor as amount of lease receivable. Option (a)…

Q: Which statement characterizes an operating lease? The lessor records depreciation and lease…

A: Solution: Following statement characterizes finance lease: The lessee records depreciation and…

Q: The cost of an asset purchased purchased under a finance lease will be equal to the carrying amount…

A: Cost of an asset purchased under finance lease is recorded at the lower of fair value of the asset…

Q: What is the treatment of an unguaranteed residual value in determining the cost of sales under a…

A: Lease is an agreement between to two parties where one party provide plant and machinery to second…

Q: There are two parties in any lease contract—the lessee and the lessor. To a lessor, a lease analysis…

A: The step involved will be: Determining the lease payments minus income taxes and any expenses…

Q: The initial direct costs incurred in relation to a lease transaction is added to get the right of…

A: The initial direct costs incurred in relation to a lease transaction is added to get the right of…

Leasing

Leasing is a contractual arrangement in which someone (a lessee) pays the owner (or lessor) of a building, land, vehicle, or other asset for the use of that asset. The lease is the agreement between lessee and lessor.