2. A company has entered into a four-year lease for a machine, with lease rentals of $150000 payable annually in advance and with an optional secondary period of three years at rentals of 80%, 60% and 40% of the annual rental in the primary period . It is agreed that these rentals represent a fair value commercial rate. The machine has a useful life of eight year and a cash value of $600000. What type of agreement could you consider this to be? Financing lease agreement Operating lease agreement Material transfer agreement Non-Disclosure agreement
2. A company has entered into a four-year lease for a machine, with lease rentals of $150000 payable annually in advance and with an optional secondary period of three years at rentals of 80%, 60% and 40% of the annual rental in the primary period . It is agreed that these rentals represent a fair value commercial rate. The machine has a useful life of eight year and a cash value of $600000. What type of agreement could you consider this to be? Financing lease agreement Operating lease agreement Material transfer agreement Non-Disclosure agreement
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
2. A company has entered into a four-year lease for a machine, with lease rentals of $150000 payable annually in advance and with an optional secondary period of three years at rentals of 80%, 60% and 40% of the annual rental in the primary period . It is agreed that these rentals represent a fair value commercial rate. The machine has a useful life of eight year and a cash value of $600000. What type of agreement could you consider this to be?
|
|||||
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
This is a popular solution!
Trending now
This is a popular solution!
Step by step
Solved in 4 steps
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Recommended textbooks for you
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education