24. One of the following statements is false: * a. If the underlying asset will not revert to the lessor, the residual value is simply ignored by the lessor in the computation of unearned interest income and gross profit on the sale. b. The underlying asset will remain with the lessee if the lease provides for either a purchase option that is reasonably to be exercised or transfer of title to the lessee upon the lease expiration. c. When a lessor actually sells an asset that it has been leasing, the difference between the sales price and the carrying amount of the lease receivable is recognized in profit or loss. d. The gain or loss that pertains to the right retained by the seller- lessee in a sales and leaseback transaction is not recognized.
24. One of the following statements is false: * a. If the underlying asset will not revert to the lessor, the residual value is simply ignored by the lessor in the computation of unearned interest income and gross profit on the sale. b. The underlying asset will remain with the lessee if the lease provides for either a purchase option that is reasonably to be exercised or transfer of title to the lessee upon the lease expiration. c. When a lessor actually sells an asset that it has been leasing, the difference between the sales price and the carrying amount of the lease receivable is recognized in profit or loss. d. The gain or loss that pertains to the right retained by the seller- lessee in a sales and leaseback transaction is not recognized.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
![24. One of the following
statements is false: *
a. If the underlying asset will not
revert to the lessor, the residual
value is simply ignored by the lessor
in the computation of unearned
interest income and gross profit on
the sale.
b. The underlying asset will remain
with the lessee if the lease provides
for either a purchase option that is
reasonably to be exercised or
transfer of title to the lessee upon
the lease expiration.
c. When a lessor actually sells an
asset that it has been leasing, the
difference between the sales price
and the carrying amount of the
lease receivable is recognized in
profit or loss.
d. The gain or loss that pertains to
the right retained by the seller-
lessee in a sales and leaseback
transaction is not recognized.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F4530d1e8-bfcd-4921-a840-e866079be199%2Fc9bd6315-4992-4e9b-86e1-d4cd3d38aeab%2Fhtjst2i_processed.jpeg&w=3840&q=75)
Transcribed Image Text:24. One of the following
statements is false: *
a. If the underlying asset will not
revert to the lessor, the residual
value is simply ignored by the lessor
in the computation of unearned
interest income and gross profit on
the sale.
b. The underlying asset will remain
with the lessee if the lease provides
for either a purchase option that is
reasonably to be exercised or
transfer of title to the lessee upon
the lease expiration.
c. When a lessor actually sells an
asset that it has been leasing, the
difference between the sales price
and the carrying amount of the
lease receivable is recognized in
profit or loss.
d. The gain or loss that pertains to
the right retained by the seller-
lessee in a sales and leaseback
transaction is not recognized.
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