34. A lessee with a finance lease containing a bargain purchase option should depreciate the leased asset over the life of the asset or the term of the lease, whichever is shorter. life of the asset or the term of the lease, whichever is longer. asset's remaining economic life. term of the lease.

Q: Each of the four independent situations below describes a sales-type lease in which annual lease…

A: Lease is defined a contractual agreement incorporated between two business entities or any other…

Q: The lessee recognizes a loss on finance lease when the fair value of the leased asset is _______…

A: Solution: When at the end of lease term, fair value of leased asset is lesser than the guaranteed…

Q: Which of the following is NOT a correct statement of one of the lease classification test for the…

A: A lease is a contractual agreement between a lessor (owner of an asset) and a lessee (user of the…

Q: ( How does a lessee record initial direct costs for an operating lease? (1 O They are expensed when…

A: An operating lease is a type of lease agreement wherein the lessee (the user) gains the right to use…

Q: Under IFRS: lessees and lessors recognize right-of-use assets. lessees always use the operating…

A: The correct answer is “lessors do not distinguish between sales-type and direct financing lease”.

Q: f the lessor meets any one of the five Group I criteria, then the lessor classifies the lease as…

A: The question is asking us to identify the type of lease based on the criteria met by the lessor. In…

Q: What does the present value of the residual value of a lease asset is called? Describe about it in…

A: Present value: This is the amount of future value reduced or discounted at a rate of interest till…

Q: If title is not expected to pass to the lessee by the end of the lease term, lease of land is…

A: Operating Lease: Under an operating lease, the right to use an Asset is given by the lessor to the…

Q: ) If a lease does not qualify as an operating lease, how will a lessee classify the lease? (1. Short…

A: A lease is a contractual agreement between two parties, the lessor (owner) and the lessee (user),…

Q: If there is a reasonable certainly that lessee will obtain ownership by the end of the lease term,…

A: Useful life of the asset or lease term, whichever is shorter

Q: On the balance sheet, the right-of-use asset under an operating lease is ________. Group of answer…

A: The question is asking about the treatment of the right-of-use asset under an operating lease on the…

Q: A lessee with a lease containing a bargain purchase option should depreciate the leased asset over…

A: A lesseewith an lease containing a bargain purchase option should depreciate the leased asset over…

Q: When can a lease create both an asset and a liability for the lessee?

A: Lease is an agreement between two persons in which one grants the right to another to use a…

Q: Which of the following is a criterion for a lease to be classified as a finance lease in the books…

A: A lease is a contract in which a landlord (the lessor) offers the tenant (the lessee) the right to…

Q: 31. In an operating lease, the lessor records Select one or more: a) Lease revenue only b)…

A: In operating lease, only the right to use assets is transferred to the lessee and the ownership of…

Q: In a lease that is appropriately recorded as a direct-financing lease by the lessor, unearned…

A: A lease is a contractual agreement between two parties wherein the lessor (owner) provides the right…

Q: 26   If title is not expected to pass to the lessee by the end of the lease term, lease of land is…

A: Lease means giving out the assets by lessor to lessee to use that assets in return of rent.…

Q: Is there a need to amortize deferred rent income/unearned rent income in an operating lease?

A: There are two type of lease which are, (1) Operating lease  (2) Finance lease In operating lease,…

Q: By the lessee, a lessee-guaranteed residual value at the beginning of a finance lease should be:…

A: In finance leases, there are certain financial arrangements between the lessor (the owner of the…

Q: Which one of the following would normally lead to a lease being classified as an operating lease?…

A: Solution: "At the inception date of the lease agreement, the present value of the total lease…

Q: liability. The portion of the lease payment in the fifth year 17. A six-year lease expiring on…

A: A lease is a contract between two parties, in which one party provides its asset for use to another…

Q: What is included in the value of the lessor's lease receivable? (l O the lease payment plus the…

A: Lease: Lease is an aggreement between lessee and lessor where lessor gives his assets to lessee for…

Q: On the balance sheet, the lease liability is measured as ________. Group of answer choices the…

A: The objective of the question is to identify how the lease liability is measured on the balance…

Q: If the gains or losses from the fluctuation in the fair value of the residual accrue to the lessor,…

A: Lease accounting is the accounting to adjust the transaction where a fixed asset is taken on rent…

Q: Which one of the following is an indicator that a lease is an operating lease for accounting…

A: Option 1: This option is incorrect because if the lease transfers ownership of the asset to the…

Q: In a sale and leaseback transaction, what is used by the buyer-lessor to depreciate the cost of the…

A: In a sale and leaseback transaction, what is used by the buyer-lessor to depreciate the cost of the…

Q: Statement I. When the bargain purchase option was not exercised, the lessee should record a loss…

A: The answer is stated below:             Note: Answering the first question as there are multiple…

Q: Which of the following statements is/are not true? Interest expense on the lease liability will…

A: PFRS 16 talks about Recognition, Classification, Measurement and Disclosure of Leases in Financial…

Q: Regarding a basic capital (finance) lease for a lessee, which of the following statements is…

A: Lease liability is a term used in accounting to describe the financial obligation a company has…

Leasing

Leasing is a contractual arrangement in which someone (a lessee) pays the owner (or lessor) of a building, land, vehicle, or other asset for the use of that asset. The lease is the agreement between lessee and lessor.