If premiums are found in a lease agreement, the equivalent of the rent payment (effective rent) will be Can be either higher or lower than the contract rent Lower than the contract rent Higher than the contract rent Same to the contract rent

If premiums are found in a lease agreement, the equivalent of the rent payment (effective rent) will be Can be either higher or lower than the contract rent Lower than the contract rent Higher than the contract rent Same to the contract rent

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter20: Accounting For Leases

Section: Chapter Questions

Problem 13GI: What is the basic difference between the accounting procedures used by a lessor for a sales-type...

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Question

Explain with each answer

If premiums are found in a lease agreement, the equivalent of the rent payment (effective
rent) will be
Can be either higher or lower than the contract rent
Lower than the contract rent
Higher than the contract rent
Same to the contract rent

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Similar questions

What is the basic difference between the accounting procedures used by a lessor for a sales-type lease and those used for a direct-financing lease?
For the lessor to account for a lease as a sales-type lease, the lease must meet:
What is the reason for excluding variable lease payments from the measurement of the lessee’s lease liability and the lessor’s receivable?
A lease agreement whereby the lessee recognized rent expense which is always equals to the rent income recognized by the lessor at a given period of time. A. Operating lease B. Finance lease C Terminating lease D. Sale type lease
In an operating lease, the: Multiple Choice lessor records interest revenue. lessee records an asset and a liability for the present value of lease payments. lessor records a receivable for the present value of lease payments. lessee records an asset and a liability for the total of the lease payments.
Why would a lease include a contingent payment provision? Explain.
When a lessor receives cash on an operating lease, which of the following accounts is increased? A. Lease Payable B. Interest Revenue: Leases C. Lease Receivable D. Rent Revenue
The discount rate influences virtually every amount reported in connection with a lease by both the lessor and the lessee. What is the lessor’s discount rate when determining the present value of lease payments? What is the lessee’s discount rate?
In accounting for a finance lease/ Sale-type lease, how are the lessee's and lessor's income statements affected?
The lessee normally measures the lease liability to be recorded as the: Select one: a. Present value of the minimum lease payments. b. The future value of the minimum lease payments c. The fair market value of the leased asset. d. The sum of the cash payments over the term of the lease.
A lease might specify that rental payments may be increased (or decreased) at some future time during the lease term depending on whether or not some specified event occurs such as revenues or profits exceeding some designated level. Under what circumstances are contingent rentals included or excluded from minimum lease payments? If excluded, how are they recognized in income determination?
When a lessee makes periodic cash payments for a finance lease, which of the following accounts is increased? A.Lease Liability B.Lease Rental Expense C.Right-of-Use Asset D.Interest Expense