ACC2363_QUIZ 2_Q #32
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Algonquin College *
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Course
2363
Subject
History
Date
Dec 6, 2023
Type
Pages
2
Uploaded by ok1807
11/29/23, 10:03 AM
Question 32 of 100 - Quiz Two
https://education.wiley.com/was/ui/v2/assessment-player/index.html?launchId=6725a273-fdf5-482a-a475-ba3a80cb0a9f#/question/31
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Your answer is correct.
On January 1, 2023, Carla Vista Corp. enters into an agreement with Nicki Rentals Inc. to lease a
machine from them. Both corporations adhere to ASPE. The following data relate to the
agreement:
1.
The term of the non-cancellable lease is three years with no renewal option. Payments of
$551000 are due on December 31 of each year.
2.
The fair value of the machine on January 1, 2023, is $1425000. The machine has a
remaining economic life of 10 years, with no residual value. The machine reverts to the
lessor upon the termination of the lease.
3.
Carla Vista depreciates all its machinery on a straight-line basis.
4.
Carla Vista’s incremental borrowing rate is 10%. Carla Vista does not have knowledge of
the 8% implicit rate used by Nicki.
5.
Immediately after signing the lease, Nicki discovers that Carla Vista is the defendant in a
lawsuit that is suf±ciently material to make collectibility of future lease payments
doubtful.
Click here to view the factor table.
From Carla Vista’s viewpoint, what type of lease is this?
other ±nance lease
operating lease
manufacturer or dealer lease
±nance lease
eTextbook and Media
11/29/23, 10:03 AM
Question 32 of 100 - Quiz Two
https://education.wiley.com/was/ui/v2/assessment-player/index.html?launchId=6725a273-fdf5-482a-a475-ba3a80cb0a9f#/question/31
2/2
Attempts: 2 of 3 used
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