Listed below are 15 terms followed by a list of phrases that describe or characterize each of the terms. Match ea phrase with the correct term. TERM 1. Interest expense 2. Disclosure only 3. Lessor's gross investment 4. Lessee's lease payments 5. Lessor's net investment 6. Initial direct costs 7. Operating lease 8. Bargain purchase option 9. Depreciable assets 10. Loss to lessee PHRASE Periodic rent payments plus excess guaranteed residual value. Deducted in lessor's computation of lease payments. Leasehold improvements. Cash paid to satisfy residual value guarantee. Sales-type lease selling expense. Depreciation longer than lease term. Sale-leaseback as operating lease. PV of lease payments plus PV of residual value. Future lease payments in each of the next five years. Periodic rent payments plus residual value. Lease payments plus guaranteed residual value. 11. Finance lease expense 12. PV of bargain purchase option price 13. Title transfers to lessee Nonlease payments. 14. Loan Rent revenue. 15. Lessor's lease payments Purchase price less than fair value. Outstanding balance times effective rate. NUMBER

Listed below are 15 terms followed by a list of phrases that describe or characterize each of the terms. Match ea phrase with the correct term. TERM 1. Interest expense 2. Disclosure only 3. Lessor's gross investment 4. Lessee's lease payments 5. Lessor's net investment 6. Initial direct costs 7. Operating lease 8. Bargain purchase option 9. Depreciable assets 10. Loss to lessee PHRASE Periodic rent payments plus excess guaranteed residual value. Deducted in lessor's computation of lease payments. Leasehold improvements. Cash paid to satisfy residual value guarantee. Sales-type lease selling expense. Depreciation longer than lease term. Sale-leaseback as operating lease. PV of lease payments plus PV of residual value. Future lease payments in each of the next five years. Periodic rent payments plus residual value. Lease payments plus guaranteed residual value. 11. Finance lease expense 12. PV of bargain purchase option price 13. Title transfers to lessee Nonlease payments. 14. Loan Rent revenue. 15. Lessor's lease payments Purchase price less than fair value. Outstanding balance times effective rate. NUMBER

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Please answer number 17 only.
On the balance sheet, the lease liability is measured as ________. Group of answer choices the present value of the lease payments less the present value of the guaranteed residual value (if any) the present value of the lease payments plus the future value of the guaranteed residual value (if any) the present value of the lease payments plus the present value of the guaranteed residual value if the lessee guarantees it(if any) the future value of the lease payments plus the future value of the guaranteed residual value (if any)
In calculating the amortization of a leased asset, the lessee should subtract a Select one: a. guaranteed residual value and amortize over the term of the lease. b. unguaranteed residual value and amortize over the term of the lease. c. guaranteed residual value and amortize over the life of the asset. d. unguaranteed residual value and amortize over the life of the asset. e. None of the above.
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The lessor expenses initial direct costs in the year of incurrence in a(n) direct-financing lease. sales-type lease. direct-financing lease and a sales-type lease. operating lease.
3. For a finance lease, the lease obligation of the lessee would be reduced periodically by a. the lease payment less the portion allocable to interest. b. the lease payment plus the interest expense for the period. c. the lease payment less depreciation expense if the lessee records depreciation. d. the lease payment less the amortization if the initial lease liability is more than the face amount, or plus the amortization if the initial lease liability is less than the face amount. e. none of the above. 4. Initial direct costs incurred by the lessor in connection with specific leasing activities as in negotiating and securing leasing arrangements in a direct finance lease would * a. result to an increase of the implicit interest rate. b. result to a decrease of the implicit interest rate. c. result to either an increase or a decrease of the implicit interest rate depending on the given facts. d. be ignored if the lease qualifies as a dealer's lease.
Revenue for a direct financing lease is calculated as ________. Group of answer choices None of the above. the higher of (1) the fair value of the leased asset or (2) the sum of the lease receivable and any lease payments paid before the lease commencement date the lower of (1) the fair value of the leased asset or (2) the sum of the lease receivable and any lease payments paid before the lease commencement date the lower of (1) the residual value of the asset or (2) the sum of the lease receivable and any lease payments paid before the lease commencement date
For a lessor, the leased asset appears on the balance sheet and continues to be depreciatedwhen the lease is classifi ed as:A . a sales-type lease.B . an operating lease.C . a fi nancing lease.
The appropriate asset value reported in the balance sheet by the lessee for an operating lease is: Multiple Choice Sum of the lease payments. The lessor's book value of the asset at the beginning of the lease. Present value of the lease payments. Zero, unless a prepayment or accrual is involved.
Access the FASB Accounting Standards Codification at the FASB website ( www.fasb.org ). Determine the specificcitation for accounting for each of the following items:1. Definition of a bargain purchase option.2. The calculation of the lessor’s gross investment in a sales-type lease.3. The disclosures required in the notes to the financial statements for an operating lease.4. The additional disclosures necessary in the notes to the financial statements if the operating lease has a leaseterm greater than one year.
Which of the following statements is/are not true? Interest expense on the lease liability will increase the carrying amount of the liability. A lessee shall measure the lease liability at the present value of the lease payments that are not paid at that date, using the lessee's incremental borrowing rate. Right-of-use asset cost will include an estimates cost to be incurred by the lessee in dismantling and removing the underlying asset, restoring the site on which it is located or restoring the underlying asset to the condition required by the terms and conditions of the lease. Group of answer choices Only statement 2. All statements are true. Only statements 2 and 3. None of the statements are true.