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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- 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?What is the difference between a lease receivable and a net investment in the lease?
- 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?When a lessor receives cash on a sales-type lease, which of the following accounts is decreased? A. Lease Receivable B. Interest Revenue: Leases C. Unearned Interest: Leases D. Lease Rental RevenueIn accounting for a finance lease/ Sale-type lease, how are the lessee's and lessor's income statements affected?
- determining whether a contract is or contains a lease? 1. Which of the following is not one of the criteria when c. Right to obtain substantially all of the economic benefits from use of an identified asset throughout the period of 'identified' if it is implicitly specified in the contract. C. the customer shall not account for the contract as a lease if a. the customer shall not account for the contract as a lease. b. the customer shall account for the contract as a lease. d. the customer shall account for the contract as a lease if that it has the right to direct the use of the asset. PROBLEM 2: MULTIPLE CHOICE - THEORY a. Identified asset b. Identified liability from use of an identified asset throughout the period of d. Right to direct the use of the identified asset throughout the period of use use 2. Which of the following statements is incorrect? a. An asset can be 'identified' if it is implicitly specified at the time it is made available for use by the lessee. b. In a lease…If the agreement type is NNN lease then why tenant are not paying their share of CAM, taxes and insurance expenses in this solution ? How to calculate Sale price in excel?At the beginning of a Type B lease, the lessor will record what asset and liability, if any?
- Which of the following statements is true about initial direct costs? A. Initial direct costs of a sales-type lease should be expensed at the commencement of the lease only if no selling profit or loss has been incurred. B. Initial direct costs are ownership-type costs such as insurance, maintenance, and taxes. C. Initial direct costs of an operating lease should be recorded by the lessor as a prepaid asset. D. Initial direct costs should always be debited against income by the lessor in the period of the inception of the lease.When is it appropriate for the lessee to use the lessor's implicit rate to calculate the present value of the lease payments? A.when the lessee's incremental borrowing rate is lower than the lessor's rate B.whenever the lessee knows what the lessor's rate is C.when the lessor's implicit rate is lower than the lessee's incremental borrowing rate D.when the lessor's rate is higher than the lessee's incremental borrowing rateUnder IFRS, in computing the present value of the minimum lease payments, the lessee should:(a) use its incremental borrowing rate in all cases. (b) use either its incremental borrowing rate or the implicit rate of the lessor, whichever is higher, assuming that the implicit rate is known to the lessee. (c) use either its incremental borrowing rate or the implicit rate of the lessor, whichever is lower, assuming that the implicit rate is known to the lessee. (d) use the implicit rate of the lessor, unless it is impracticable to determine the implicit rate.