Describe the criteria to determine whether to capitalize a lease or not.

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Answer 1

Question

Chapter 17, Problem 1Q

To determine

Describe the criteria to determine whether to capitalize a lease or not.

Expert Solution & Answer

Explanation of Solution

Capitalization of lease

A lease that satisfies any of the following conditions can be capitalized and be called a capital lease:

At the end of the tenure, the ownership is transferred to the lessee.
The lease can be bought at a reasonable price.
The term of the lease in more then and equal to the ¾ of the life of the asset.
Rental value of the property is more then and equal to the 90% of the leased asset.

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Answer 2

Question

Chapter 17, Problem 1Q

To determine

Describe the criteria to determine whether to capitalize a lease or not.

Expert Solution & Answer

Explanation of Solution

Capitalization of lease

A lease that satisfies any of the following conditions can be capitalized and be called a capital lease:

At the end of the tenure, the ownership is transferred to the lessee.
The lease can be bought at a reasonable price.
The term of the lease in more then and equal to the ¾ of the life of the asset.
Rental value of the property is more then and equal to the 90% of the leased asset.

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Answer 3

Question

Chapter 17, Problem 1Q

To determine

Describe the criteria to determine whether to capitalize a lease or not.

Expert Solution & Answer

Explanation of Solution

Capitalization of lease

A lease that satisfies any of the following conditions can be capitalized and be called a capital lease:

At the end of the tenure, the ownership is transferred to the lessee.
The lease can be bought at a reasonable price.
The term of the lease in more then and equal to the ¾ of the life of the asset.
Rental value of the property is more then and equal to the 90% of the leased asset.

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Answer 4

Question

Chapter 17, Problem 1Q

To determine

Describe the criteria to determine whether to capitalize a lease or not.

Expert Solution & Answer

Explanation of Solution

Capitalization of lease

A lease that satisfies any of the following conditions can be capitalized and be called a capital lease:

At the end of the tenure, the ownership is transferred to the lessee.
The lease can be bought at a reasonable price.
The term of the lease in more then and equal to the ¾ of the life of the asset.
Rental value of the property is more then and equal to the 90% of the leased asset.

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Answer 5

Chapter 17, Problem 1Q

To determine

Describe the criteria to determine whether to capitalize a lease or not.

Expert Solution & Answer

Explanation of Solution

Capitalization of lease

A lease that satisfies any of the following conditions can be capitalized and be called a capital lease:

At the end of the tenure, the ownership is transferred to the lessee.
The lease can be bought at a reasonable price.
The term of the lease in more then and equal to the ¾ of the life of the asset.
Rental value of the property is more then and equal to the 90% of the leased asset.

Answer 6

Chapter 17, Problem 1Q

To determine

Describe the criteria to determine whether to capitalize a lease or not.

Expert Solution & Answer

Explanation of Solution

Capitalization of lease

A lease that satisfies any of the following conditions can be capitalized and be called a capital lease:

At the end of the tenure, the ownership is transferred to the lessee.
The lease can be bought at a reasonable price.
The term of the lease in more then and equal to the ¾ of the life of the asset.
Rental value of the property is more then and equal to the 90% of the leased asset.

Answer 7

Chapter 17, Problem 1Q

To determine

Describe the criteria to determine whether to capitalize a lease or not.

Answer 8

Expert Solution & Answer

Explanation of Solution

Capitalization of lease

A lease that satisfies any of the following conditions can be capitalized and be called a capital lease:

At the end of the tenure, the ownership is transferred to the lessee.
The lease can be bought at a reasonable price.
The term of the lease in more then and equal to the ¾ of the life of the asset.
Rental value of the property is more then and equal to the 90% of the leased asset.