Initial direct costs incurred by the lessor in an operating lease should be A. expensed in the year of incurrence by including them in the cost of goods sold or by treating them as a selling expense. B. deferred and recognized as reduction in the interest rate implicit in the lease. C. capitalized as part of asset cost and depreciated over the lease term. D. deferred and carried on the statement of financial position until the end of the lease term.
Initial direct costs incurred by the lessor in an operating lease should be A. expensed in the year of incurrence by including them in the cost of goods sold or by treating them as a selling expense. B. deferred and recognized as reduction in the interest rate implicit in the lease. C. capitalized as part of asset cost and depreciated over the lease term. D. deferred and carried on the statement of financial position until the end of the lease term.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
t34
Initial direct costs incurred by the lessor in an operating lease should be
A. expensed in the year of incurrence by including them in the cost of goods sold or by treating them as a selling
expense.
B. deferred and recognized as reduction in the interest rate implicit in the lease.
C. capitalized as part of asset cost and
D. deferred and carried on the
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
Step by step
Solved in 2 steps
Recommended textbooks for you
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education