Lease: A contractual arrangement between the owner of the asset and the user of the asset for a fixed amount of money is termed lease. In this contract the owner of the asset permits the user to use the property for a fixed sum of money received at the time of handing over the asset. At the end of the contract tenure the user of the asset need to return the asset to the owner. The parties involved in the contract are termed the lessor the owner of the asset and the lessee the user of the asset.
Operational lease method: A process of using the asset for a rental payable in installments or in bulk without transfer of ownership of the asset is termed operation lease. The lessee has to return back the asset once the tenure of lease is over. The expenses like insurance, maintenance and repair expenses are borne by the lessor.
To determine the procedure of recording operational lease transaction.
Want to see the full answer?
Check out a sample textbook solution
Chapter 21 Solutions
INTERMEDIATE ACCOUNTING-NEXTGEN ACCESS
- When preparing the trial balance, the accountant of Zenith Co. noticed that the debit column exceeded the credit column by $1,000. Which of the following errors could cause such an imbalance? A) A transaction not recorded at all B) Reversing the debit and credit C) Posting an amount twice to the debit side D) Recording a sale as a purchase MCQarrow_forwardI am looking for the correct answer to this general accounting question with appropriate explanations.arrow_forwardDon't use AIarrow_forward
- General accountingarrow_forwardWhat are the required sales?arrow_forwardLuma Corp. had net credit sales of $2,400,000 in 2023. The beginning accounts receivable balance was $180,000, and the ending balance was $210,000. (a) What is the receivables turnover? (b) What is the average collection period in days?arrow_forward
AccountingAccountingISBN:9781337272094Author:WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.Publisher:Cengage Learning,
Accounting Information SystemsAccountingISBN:9781337619202Author:Hall, James A.Publisher:Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis...AccountingISBN:9780134475585Author:Srikant M. Datar, Madhav V. RajanPublisher:PEARSON
Intermediate AccountingAccountingISBN:9781259722660Author:J. David Spiceland, Mark W. Nelson, Wayne M ThomasPublisher:McGraw-Hill Education
Financial and Managerial AccountingAccountingISBN:9781259726705Author:John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting PrinciplesPublisher:McGraw-Hill Education