Explain when and how a lessee accounts for a lease by the short-cut method.

Q: For the lessor to account for a lease as a sales-type lease, the lease must meet:

A: A sales-type lease assumes that the lease serves as a transfer of property to the customer, or…

Q: Which of the following does not affect the computation of the rental income/expense under an…

A: Security deposits does not affect the computation of the rental income/expense under an operating…

Q: Discuss how the lease liability would be measured at lease inception.

A: Lease Liability is the present value of the financial obligation of the lease for the lease…

Q: Describe the effect of a “bargain-purchase option” onaccounting for a capital lease transaction by a…

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Q: Describe how a "bargain buy option" affects the lessee's accounting for a finance lease deal.

A: HERE IS THE ANSWER:

Q: What comprises a lessee’s minimum lease payments? What is excluded?

A: A lease is a contractual obligation under which one party (lessee) uses the assets or resources of…

Q: Describe and demonstrate how the lessee accounts for a finance lease and the lessor accounts for a…

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Q: In a Type A lease, “front loading” of lease expense and lease revenue occurs. What does this mean,…

A: Lease:An agreement of contract that is made to transfer the right to utlize the resources for a…

Q: What payments are included in the lease liability?

A: Lease agreement refers to an agreement in which a contract is made to get the asset on lease. The…

Q: What is a “per procedure” lease and how does it differ from a standard lease?

A: A lease is the written agreement between the two parties in which one transfers the asset to the…

Q: What are the guidelines for determining when a material amount of land is involved in a lease?

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Q: Why the lease is considered a “short-term lease”?

A: Lease:   It is an agreement between an owner of an asset (Lessor) and a tenant (lessee) where the…

Q: Risks and benefits of ownership transfer to the lessee with an operating lease. true false

A: Under an operating lease, ownership risks and benefits are not transferred to the lessee.

Q: Who are the two parties to a lease transaction?

A: Lease: Leases are agreements in which the proprietor of the asset permits another party to utilize…

Q: From a lessee perspective, distinguish between a finance lease and an operating lease.

A: Lessees have available two lease accounting methods: (a) the operating method and (b) the…

Q: distinguish between a fi nance lease and an operating lease from the perspectives of the lessorand…

A: Difference between a finance lease and an operating lease from the perspectives of the lessorand the…

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: What is the reason for excluding variable lease payments from the measurement of the lessee’s lease…

A: Under IFRS 16, In lease payments there are two types of payments. One is fixed and other is variable…

Q: Describe the accounting for leases by lessors.

A: There are mainly 2 types of lease:   1. Finance and 2. Operating    Finance lease is a lease where…

Q: Why do we need to differentiate lessor accounting for direct financing lease and sales-type lease?

A: Lease contract: Lease contract is an arrangement occurs between two individuals or entities through…

Q: At the beginning of an operating lease, the lessee will record what asset and liability, if any?

A: During the lease period if ownership of the asset is not transferred to Lessee. Lessee has only…

Q: Explain the distinction between a direct-financing leaseand a sales-type lease for a lessor.

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Q: Explain the difference in lessee income statement and balance sheet presentation for a finance…

A: Lease agreement refers to an agreement in which a contract is made to get the asset on lease. The…

Q: At the beginning of a Type B lease, the lessee will record what asset and liability, if any?

A: Type B lease implies to the lease in which insignificant portion of the useful life of the asset is…

Q: Compare the way a bargain purchase option and a residual value are treated by the lessee when…

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Q: What is the composition of lease Payments?

A: Lease is a kind of monthly rental payment made by the lessee to the lessor in return of the right to…

Q: The basic concept of “substance over form” influence lease accounting. Explain in detail how it does…

A: Substance over form is an accounting concept that business transactions should be accounted in…

Q: Outline the accounting processes that must be followed by a lessee when using the operational lease…

A: The question deals with the accounting processes that must be followed by a lessee when using the…

Q: IFRS (a) What is included in the measurement of (1) the lease liability and (2) the right-ofuse…

A: International financial reporting standard (IFRS) 16 is the standard for accounting for Lease. This…

Q: What nonlease costs might be included as part of lease payments? How are they accounted for by the…

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Q: Describe the accounting for leases by lessees.

A: Finance lease is a lease where all the risks and the rewards are transferred from the lessor to the…

Q: A lease transfers the right to use an identified asset for a period of time in exchange for rental…

A: In this question, we are required to determine whether the given statement regarding lease is true…

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.