Criteria for Capital lease: In order to be classified as a capital lease, a leased asset must meet one of the following criteria: 1. Transfer of ownership from lessor to lessee. 2. Purchase of lease asset with minimum payment of $1. 3. The lease term is more than the 75% or more of the useful life of the asset. 4. Present value of the lease payments is equal or more than 90% of fair market value of the asset. To determine : Determine whether the company in each separate case 1 through 3 has entered into an operating lease or a capital lease.

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Answer 1

Question

Chapter 14, Problem 17E

To determine

Criteria for Capital lease:

In order to be classified as a capital lease, a leased asset must meet one of the following criteria:

1. Transfer of ownership from lessor to lessee.

2. Purchase of lease asset with minimum payment of $1.

3. The lease term is more than the 75% or more of the useful life of the asset.

4. Present value of the lease payments is equal or more than 90% of fair market value of the asset.

To determine:

Determine whether the company in each separate case 1 through 3 has entered into an operating lease or a capital lease.

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Answer 2

Question

Chapter 14, Problem 17E

To determine

Criteria for Capital lease:

In order to be classified as a capital lease, a leased asset must meet one of the following criteria:

1. Transfer of ownership from lessor to lessee.

2. Purchase of lease asset with minimum payment of $1.

3. The lease term is more than the 75% or more of the useful life of the asset.

4. Present value of the lease payments is equal or more than 90% of fair market value of the asset.

To determine:

Determine whether the company in each separate case 1 through 3 has entered into an operating lease or a capital lease.

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Answer 3

Question

Chapter 14, Problem 17E

To determine

Criteria for Capital lease:

In order to be classified as a capital lease, a leased asset must meet one of the following criteria:

1. Transfer of ownership from lessor to lessee.

2. Purchase of lease asset with minimum payment of $1.

3. The lease term is more than the 75% or more of the useful life of the asset.

4. Present value of the lease payments is equal or more than 90% of fair market value of the asset.

To determine:

Determine whether the company in each separate case 1 through 3 has entered into an operating lease or a capital lease.

Expert Solution & Answer

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Answer 4

Question

Chapter 14, Problem 17E

To determine

Criteria for Capital lease:

In order to be classified as a capital lease, a leased asset must meet one of the following criteria:

1. Transfer of ownership from lessor to lessee.

2. Purchase of lease asset with minimum payment of $1.

3. The lease term is more than the 75% or more of the useful life of the asset.

4. Present value of the lease payments is equal or more than 90% of fair market value of the asset.

To determine:

Determine whether the company in each separate case 1 through 3 has entered into an operating lease or a capital lease.

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Answer 5

Chapter 14, Problem 17E

To determine

Criteria for Capital lease:

In order to be classified as a capital lease, a leased asset must meet one of the following criteria:

1. Transfer of ownership from lessor to lessee.

2. Purchase of lease asset with minimum payment of $1.

3. The lease term is more than the 75% or more of the useful life of the asset.

4. Present value of the lease payments is equal or more than 90% of fair market value of the asset.

To determine:

Determine whether the company in each separate case 1 through 3 has entered into an operating lease or a capital lease.

Answer 6

Chapter 14, Problem 17E

To determine

Criteria for Capital lease:

In order to be classified as a capital lease, a leased asset must meet one of the following criteria:

1. Transfer of ownership from lessor to lessee.

2. Purchase of lease asset with minimum payment of $1.

3. The lease term is more than the 75% or more of the useful life of the asset.

4. Present value of the lease payments is equal or more than 90% of fair market value of the asset.

To determine:

Determine whether the company in each separate case 1 through 3 has entered into an operating lease or a capital lease.

Answer 7

Chapter 14, Problem 17E

To determine

Criteria for Capital lease:

In order to be classified as a capital lease, a leased asset must meet one of the following criteria:

1. Transfer of ownership from lessor to lessee.

2. Purchase of lease asset with minimum payment of $1.

3. The lease term is more than the 75% or more of the useful life of the asset.

4. Present value of the lease payments is equal or more than 90% of fair market value of the asset.

To determine:

Determine whether the company in each separate case 1 through 3 has entered into an operating lease or a capital lease.

Answer 8

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Answer 9

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Answer 10

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Answer 11

Ch. 14 - Prob. 1DQ Ch. 14 - Prob. 2DQ Ch. 14 - Prob. 3DQ Ch. 14 - Prob. 4DQ Ch. 14 - Prob. 5DQ Ch. 14 - Prob. 6DQ Ch. 14 - Prob. 7DQ Ch. 14 - Prob. 8DQ Ch. 14 - Prob. 9DQ Ch. 14 - Prob. 10DQ

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