Executory Costs Executory costs are the costs such as maintenance, insurance and taxes borne by the lessee (user) on an asset. Capital lease This type of lease is a situation whereby the lessor (owner) transfers the ownership of leased asset to the lessee (user) on the maturity period of terms of lease. This is non-cancellable in nature and it extends to long term and can also be capitalized. To define: what are executory costs

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Chapter 15, Problem 15.10Q

1)

To determine

Executory Costs

Executory costs are the costs such as maintenance, insurance and taxes borne by the lessee (user) on an asset.

Capital lease

This type of lease is a situation whereby the lessor (owner) transfers the ownership of leased asset to the lessee (user) on the maturity period of terms of lease. This is non-cancellable in nature and it extends to long term and can also be capitalized.

To define: what are executory costs

(2)

To determine

To describe: the accounting in capital lease when paid by the lessee.

(3)

To determine

To describe: the accounting in capital lease when paid by the lessor.

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