Operating lease: Operating lease is a contract in which the owner retains the risk and rewards of ownership, a lessee under an operating lease only reports lease payments as an expense and does not report leased asset or lease liability in the balance sheet whereas financial leases in which lessor transfers all risk and reward of ownership to the lessee. The journal entry at the start of the lease records any assets and liabilities.

Question

Want to see the full answer?

Answer 1

Question

Chapter 10, Problem 13PSA

a

To determine

Concept Introduction:

Operating lease: Operating lease is a contract in which the owner retains the risk and rewards of ownership, a lessee under an operating lease only reports lease payments as an expense and does not report leased asset or lease liability in the balance sheet whereas financial leases in which lessor transfers all risk and reward of ownership to the lessee.

The journal entry at the start of the lease records any assets and liabilities.

b

To determine

Concept Introduction:

Operating lease: Operating lease is a contract in which the owner retains the risk and rewards of ownership, a lessee under an operating lease only reports lease payments as an expense and does not report leased asset or lease liability in the balance sheet whereas financial leases in which lessor transfers all risk and reward of ownership to the lessee.

The journal entry for the first-year lease payment.

c

To determine

Concept Introduction:

Operating lease: Operating lease is a contract in which the owner retains the risk and rewards of ownership, a lessee under an operating lease only reports lease payments as an expense and does not report leased asset or lease liability in the balance sheet whereas financial leases in which lessor transfers all risk and reward of ownership to the lessee.

The journal entry to record straight-line amortization for three years.

d

To determine

Concept Introduction:

Operating lease: Operating lease is a contract in which the owner retains the risk and rewards of ownership, a lessee under an operating lease only reports lease payments as an expense and does not report leased asset or lease liability in the balance sheet whereas financial leases in which lessor transfers all risk and reward of ownership to the lessee.

The journal entry for lease payments at the end of years 1 and 2

Expert Solution & Answer

Want to see the full answer?

Check out a sample textbook solution

See solution

Students have asked these similar questions

Applying New Lease Accounting Standards for Operating Leases On January 1 of the current year, CCH Corporation entered into the following lease contract. Based on the facts, CCH Corporation classifies the lease as an operating lease. Details of lease contract Leased asset Office space Lease term 5 years Annual lease payment $115,487 Upfront fees $10,000 Cost of debt capital 5% a. Determine the amount of the lease liability that CCH will add to its balance sheet at the inception of the lease. Amount of lease liability b. What amount will be added to the balance sheet as an asset? Amount added as an asset The rest of the questions are given in pictures below. please answer all parts correctly. i will upvote. thank you!!

a) Determine the rate of interest implicit in the lease and calculate the present value ofthe lease payments. b) Prepare the journal entries in the books of Tea TreeLtd for the years ending 30 June2021 and 30 June 2022. c) Prepare the portion of the statement of financial position for the year ending 30 June2022 relating to the lease asset and lease liability.

The following information relates to an equipment lease with an inception date of January 1: Fair value of equipment at lease inception, $56,000 Lease term, 5 years Economic life of property, 6 years Implicit interest rate, 7% Annual lease payment due on December 31, $13,200 The equipment reverts back to the lessor at the end of the lease term. How much is recorded as the lease liability on the lease inception date? Select one: a. $66,000 b. $56,000 c. $57,911 d. $54,123

Answer 2

Question

Chapter 10, Problem 13PSA

a

To determine

Concept Introduction:

Operating lease: Operating lease is a contract in which the owner retains the risk and rewards of ownership, a lessee under an operating lease only reports lease payments as an expense and does not report leased asset or lease liability in the balance sheet whereas financial leases in which lessor transfers all risk and reward of ownership to the lessee.

The journal entry at the start of the lease records any assets and liabilities.

b

To determine

Concept Introduction:

Operating lease: Operating lease is a contract in which the owner retains the risk and rewards of ownership, a lessee under an operating lease only reports lease payments as an expense and does not report leased asset or lease liability in the balance sheet whereas financial leases in which lessor transfers all risk and reward of ownership to the lessee.

The journal entry for the first-year lease payment.

c

To determine

Concept Introduction:

Operating lease: Operating lease is a contract in which the owner retains the risk and rewards of ownership, a lessee under an operating lease only reports lease payments as an expense and does not report leased asset or lease liability in the balance sheet whereas financial leases in which lessor transfers all risk and reward of ownership to the lessee.

The journal entry to record straight-line amortization for three years.

d

To determine

Concept Introduction:

Operating lease: Operating lease is a contract in which the owner retains the risk and rewards of ownership, a lessee under an operating lease only reports lease payments as an expense and does not report leased asset or lease liability in the balance sheet whereas financial leases in which lessor transfers all risk and reward of ownership to the lessee.

The journal entry for lease payments at the end of years 1 and 2

Expert Solution & Answer

Want to see the full answer?

Check out a sample textbook solution

See solution

Answer 3

Question

Chapter 10, Problem 13PSA

a

To determine

Concept Introduction:

Operating lease: Operating lease is a contract in which the owner retains the risk and rewards of ownership, a lessee under an operating lease only reports lease payments as an expense and does not report leased asset or lease liability in the balance sheet whereas financial leases in which lessor transfers all risk and reward of ownership to the lessee.

The journal entry at the start of the lease records any assets and liabilities.

b

To determine

Concept Introduction:

Operating lease: Operating lease is a contract in which the owner retains the risk and rewards of ownership, a lessee under an operating lease only reports lease payments as an expense and does not report leased asset or lease liability in the balance sheet whereas financial leases in which lessor transfers all risk and reward of ownership to the lessee.

The journal entry for the first-year lease payment.

c

To determine

Concept Introduction:

Operating lease: Operating lease is a contract in which the owner retains the risk and rewards of ownership, a lessee under an operating lease only reports lease payments as an expense and does not report leased asset or lease liability in the balance sheet whereas financial leases in which lessor transfers all risk and reward of ownership to the lessee.

The journal entry to record straight-line amortization for three years.

d

To determine

Concept Introduction:

Operating lease: Operating lease is a contract in which the owner retains the risk and rewards of ownership, a lessee under an operating lease only reports lease payments as an expense and does not report leased asset or lease liability in the balance sheet whereas financial leases in which lessor transfers all risk and reward of ownership to the lessee.

The journal entry for lease payments at the end of years 1 and 2

Expert Solution & Answer

Want to see the full answer?

Check out a sample textbook solution

See solution

Answer 4

Question

Chapter 10, Problem 13PSA

a

To determine

Concept Introduction:

Operating lease: Operating lease is a contract in which the owner retains the risk and rewards of ownership, a lessee under an operating lease only reports lease payments as an expense and does not report leased asset or lease liability in the balance sheet whereas financial leases in which lessor transfers all risk and reward of ownership to the lessee.

The journal entry at the start of the lease records any assets and liabilities.

b

To determine

Concept Introduction:

Operating lease: Operating lease is a contract in which the owner retains the risk and rewards of ownership, a lessee under an operating lease only reports lease payments as an expense and does not report leased asset or lease liability in the balance sheet whereas financial leases in which lessor transfers all risk and reward of ownership to the lessee.

The journal entry for the first-year lease payment.

c

To determine

Concept Introduction:

Operating lease: Operating lease is a contract in which the owner retains the risk and rewards of ownership, a lessee under an operating lease only reports lease payments as an expense and does not report leased asset or lease liability in the balance sheet whereas financial leases in which lessor transfers all risk and reward of ownership to the lessee.

The journal entry to record straight-line amortization for three years.

d

To determine

Concept Introduction:

Operating lease: Operating lease is a contract in which the owner retains the risk and rewards of ownership, a lessee under an operating lease only reports lease payments as an expense and does not report leased asset or lease liability in the balance sheet whereas financial leases in which lessor transfers all risk and reward of ownership to the lessee.

The journal entry for lease payments at the end of years 1 and 2

Expert Solution & Answer

Want to see the full answer?

Check out a sample textbook solution

See solution

Answer 5

Chapter 10, Problem 13PSA

a

To determine

Concept Introduction:

Operating lease: Operating lease is a contract in which the owner retains the risk and rewards of ownership, a lessee under an operating lease only reports lease payments as an expense and does not report leased asset or lease liability in the balance sheet whereas financial leases in which lessor transfers all risk and reward of ownership to the lessee.

The journal entry at the start of the lease records any assets and liabilities.

b

To determine

Concept Introduction:

Operating lease: Operating lease is a contract in which the owner retains the risk and rewards of ownership, a lessee under an operating lease only reports lease payments as an expense and does not report leased asset or lease liability in the balance sheet whereas financial leases in which lessor transfers all risk and reward of ownership to the lessee.

The journal entry for the first-year lease payment.

c

To determine

Concept Introduction:

Operating lease: Operating lease is a contract in which the owner retains the risk and rewards of ownership, a lessee under an operating lease only reports lease payments as an expense and does not report leased asset or lease liability in the balance sheet whereas financial leases in which lessor transfers all risk and reward of ownership to the lessee.

The journal entry to record straight-line amortization for three years.

d

To determine

Concept Introduction:

Operating lease: Operating lease is a contract in which the owner retains the risk and rewards of ownership, a lessee under an operating lease only reports lease payments as an expense and does not report leased asset or lease liability in the balance sheet whereas financial leases in which lessor transfers all risk and reward of ownership to the lessee.

The journal entry for lease payments at the end of years 1 and 2

Answer 6

Chapter 10, Problem 13PSA

a

To determine

Concept Introduction:

Operating lease: Operating lease is a contract in which the owner retains the risk and rewards of ownership, a lessee under an operating lease only reports lease payments as an expense and does not report leased asset or lease liability in the balance sheet whereas financial leases in which lessor transfers all risk and reward of ownership to the lessee.

The journal entry at the start of the lease records any assets and liabilities.

Answer 7

Chapter 10, Problem 13PSA

a

To determine

Concept Introduction:

Operating lease: Operating lease is a contract in which the owner retains the risk and rewards of ownership, a lessee under an operating lease only reports lease payments as an expense and does not report leased asset or lease liability in the balance sheet whereas financial leases in which lessor transfers all risk and reward of ownership to the lessee.

The journal entry at the start of the lease records any assets and liabilities.

Answer 8

b

To determine

Concept Introduction:

Operating lease: Operating lease is a contract in which the owner retains the risk and rewards of ownership, a lessee under an operating lease only reports lease payments as an expense and does not report leased asset or lease liability in the balance sheet whereas financial leases in which lessor transfers all risk and reward of ownership to the lessee.

The journal entry for the first-year lease payment.

Answer 9

b

To determine

Concept Introduction:

Operating lease: Operating lease is a contract in which the owner retains the risk and rewards of ownership, a lessee under an operating lease only reports lease payments as an expense and does not report leased asset or lease liability in the balance sheet whereas financial leases in which lessor transfers all risk and reward of ownership to the lessee.

The journal entry for the first-year lease payment.

Answer 10

c

To determine

Concept Introduction:

Operating lease: Operating lease is a contract in which the owner retains the risk and rewards of ownership, a lessee under an operating lease only reports lease payments as an expense and does not report leased asset or lease liability in the balance sheet whereas financial leases in which lessor transfers all risk and reward of ownership to the lessee.

The journal entry to record straight-line amortization for three years.

Answer 11

c

To determine

Concept Introduction:

Operating lease: Operating lease is a contract in which the owner retains the risk and rewards of ownership, a lessee under an operating lease only reports lease payments as an expense and does not report leased asset or lease liability in the balance sheet whereas financial leases in which lessor transfers all risk and reward of ownership to the lessee.

The journal entry to record straight-line amortization for three years.

Answer 12

d

To determine

Concept Introduction:

Operating lease: Operating lease is a contract in which the owner retains the risk and rewards of ownership, a lessee under an operating lease only reports lease payments as an expense and does not report leased asset or lease liability in the balance sheet whereas financial leases in which lessor transfers all risk and reward of ownership to the lessee.

The journal entry for lease payments at the end of years 1 and 2

Answer 13

d

To determine

Concept Introduction:

Operating lease: Operating lease is a contract in which the owner retains the risk and rewards of ownership, a lessee under an operating lease only reports lease payments as an expense and does not report leased asset or lease liability in the balance sheet whereas financial leases in which lessor transfers all risk and reward of ownership to the lessee.

The journal entry for lease payments at the end of years 1 and 2

Answer 14

Expert Solution & Answer

Answer 15

Expert Solution & Answer

Answer 16

Want to see the full answer?

Check out a sample textbook solution

See solution

Answer 17

Ch. 10 - Prob. 1QS Ch. 10 - Prob. 2QS Ch. 10 - Prob. 3QS Ch. 10 - Prob. 4QS Ch. 10 - Prob. 5QS Ch. 10 - Prob. 6QS Ch. 10 - Prob. 7QS Ch. 10 - Prob. 8QS Ch. 10 - Prob. 9QS Ch. 10 - Prob. 10QS

Want to see the full answer?

Chapter 10 Solutions