Describe the criteria to determine whether to capitalize a lease or not.

Question

Want to see more full solutions like this?

Answer 1

Question

Chapter 12, Problem 1Q

To determine

Describe the criteria to determine whether to capitalize a lease or not.

Expert Solution & Answer

Explanation of Solution

Capitalization of lease

A lease that satisfies any of the following conditions can be capitalized and be called a capital lease:

At the end of the tenure, the ownership is transferred to the lessee.
The lease can be bought at a reasonable price.
The term of the lease in more then and equal to the ¾ of the life of the asset.
Rental value of the property is more then and equal to the 90% of the leased asset.

Want to see more full solutions like this?

Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!

Answer 2

Question

Chapter 12, Problem 1Q

To determine

Describe the criteria to determine whether to capitalize a lease or not.

Expert Solution & Answer

Explanation of Solution

Capitalization of lease

A lease that satisfies any of the following conditions can be capitalized and be called a capital lease:

At the end of the tenure, the ownership is transferred to the lessee.
The lease can be bought at a reasonable price.
The term of the lease in more then and equal to the ¾ of the life of the asset.
Rental value of the property is more then and equal to the 90% of the leased asset.

Want to see more full solutions like this?

Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!

Answer 3

Question

Chapter 12, Problem 1Q

To determine

Describe the criteria to determine whether to capitalize a lease or not.

Expert Solution & Answer

Explanation of Solution

Capitalization of lease

A lease that satisfies any of the following conditions can be capitalized and be called a capital lease:

At the end of the tenure, the ownership is transferred to the lessee.
The lease can be bought at a reasonable price.
The term of the lease in more then and equal to the ¾ of the life of the asset.
Rental value of the property is more then and equal to the 90% of the leased asset.

Want to see more full solutions like this?

Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!

Answer 4

Question

Chapter 12, Problem 1Q

To determine

Describe the criteria to determine whether to capitalize a lease or not.

Expert Solution & Answer

Explanation of Solution

Capitalization of lease

A lease that satisfies any of the following conditions can be capitalized and be called a capital lease:

At the end of the tenure, the ownership is transferred to the lessee.
The lease can be bought at a reasonable price.
The term of the lease in more then and equal to the ¾ of the life of the asset.
Rental value of the property is more then and equal to the 90% of the leased asset.

Want to see more full solutions like this?

Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!

Answer 5

Chapter 12, Problem 1Q

To determine

Describe the criteria to determine whether to capitalize a lease or not.

Expert Solution & Answer

Explanation of Solution

Capitalization of lease

A lease that satisfies any of the following conditions can be capitalized and be called a capital lease:

At the end of the tenure, the ownership is transferred to the lessee.
The lease can be bought at a reasonable price.
The term of the lease in more then and equal to the ¾ of the life of the asset.
Rental value of the property is more then and equal to the 90% of the leased asset.

Answer 6

Chapter 12, Problem 1Q

To determine

Describe the criteria to determine whether to capitalize a lease or not.

Expert Solution & Answer

Explanation of Solution

Capitalization of lease

A lease that satisfies any of the following conditions can be capitalized and be called a capital lease:

At the end of the tenure, the ownership is transferred to the lessee.
The lease can be bought at a reasonable price.
The term of the lease in more then and equal to the ¾ of the life of the asset.
Rental value of the property is more then and equal to the 90% of the leased asset.

Answer 7

Chapter 12, Problem 1Q

To determine

Describe the criteria to determine whether to capitalize a lease or not.

Answer 8

Expert Solution & Answer

Explanation of Solution

Capitalization of lease

A lease that satisfies any of the following conditions can be capitalized and be called a capital lease:

At the end of the tenure, the ownership is transferred to the lessee.
The lease can be bought at a reasonable price.
The term of the lease in more then and equal to the ¾ of the life of the asset.
Rental value of the property is more then and equal to the 90% of the leased asset.