What are the differences between a direct-financing and a sales-type lease for a lessor? Why would a lessor provide direct-financing to a lessee? What types of organizations provide direct-financing leases?

Q: Which are the terms may be included in lease agreements, elements that are commonly included in many…

A: A lease is the commitment to purchase an asset by providing rental payments to the lessor.

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

A:

Q: How does a leveraged lease differ from a nonleveraged lease?

A: A leveraged lease is an agreement that is partially financed by the third party creditor. In this…

Q: Under ASPE, the lessor is required to expense any direct costs associated with a lease up front.…

A: Accounting Standards for Private Enterprises Accounting Standards for Private Enterprises is an…

Q: Why would a lease include a contingent payment provision? Explain.

A: Contingency payment provisions is a provision for a possible event or circumstance which is not…

Q: What is the difference between an “operating” and a “capital” lease? In easy terms please!

A: The criteria for defining the lease as a capital lease or operating lease   As per the notes issued…

Q: What do we mean by overage in a retail lease agreement? How might it be calculated?

A: Overage on retail lease contract and its computation as follows: Retail lease contracts show a least…

Q: Does a lessee have an option not to separate lease and non lease components?

A: Lease: A lease or a lease agreement is a binding contract between two parties that dictates…

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: Define Finance/Sales-Type Leases.

A: Lease: Lease is a contractual agreement whereby the right to use an asset for a particular period…

Q: Why is the reporting of leases required? Justify your response.

A: A lease is an agreement where an asset is taken on rent and Lessor receives Lease rental in return.…

Q: motivated

A: Leasing refers to the contract between lesser and lessee for using the asset. It is a form of…

Q: Walker Company is a manufacturer and lessor of computer equipment. What should be the nature of its…

A: Lease: A contractual arrangement between the owner of the asset and the user of the asset for a…

Q: ease terms can be considered to be "significantly affected": a. when the terms are the same for…

A: Leases - It is contract between lessor and lessee wherein an asset is given to lessee in…

Q: What are some lease provisions that would cause a lease to beclassified as a non-tax-oriented lease?

A: Lease: A type of contract where one party gives property, land, or services to another party for the…

Q: What are the criteria for classifying a lease as operating or capital? Why is there a difference…

A: Criteria for classifying a lease as operating or capital: There are five different types of leasing…

Q: Explain the concept of accounting for leases and the criteria used to determine whether a lease…

A: Accounting for leases involves recognizing and recording lease transactions in a company's financial…

Q: Assume a lessee leases equipment and insists on terms that qualify it as an operating lease, barely…

A: In simple term lease means it was a specific contract or agreement between the two parts to use the…

Q: What is meant by the term “off-balance sheet financing”? When do leases provide such financing and…

A: Financing in the normal course means the company has taken a loan from the investor when there is a…

Q: What are the disadvantages of lease?

A: Lease:   Lease is a contractual agreement whereby the right to use an asset for a particular…

Q: What is selling profit on a sales-type lease? How do we account for a sales-type lease with a…

A: Sales-type lease: Sales type lease in equivalent type of direct financing whereby the owner (lessor)…

Q: Which of the following is not one of the classifications for leases from the lessor’s viewpoint?…

A: Operating Leasing- Operating lease the right related to the asset is not transferred to the…

Q: A lessee should classify a lease transaction as a finance lease if it is noncancelable and one or…

A: A lease transaction refers to an agreement between two parties, the lessor and the lessee, where the…

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: When are initial direct costs recognized in an operating lease? In a direct financing lease? In a…

A:

Q: Finance leases are agreements that are formulated as leases, but are installment purchases, i.e.,…

A: Finance Lease: In this type of lease, the notional ownership is transferred by the lessor to lessee…

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.