Question

Customer enters into a contract with an aircraft owner for the use of an explicitly specified...

Customer enters into a contract with an aircraft owner for the use of an explicitly specified aircraft for a two year period. The contract details the interior and exterior specifications for the aircraft. Is this contract containing a lease and why?

Business   Accounting   
0 0
Add a commentTranscribed image text
Next >

Homework Answers

Answer #1

Answer:

Lease is a special type of contract where the Lessor gives permission to the Lessee to own and use some specific assets for a specified period in consideration of some amount known as the Lease Rentals. There are certain Features and characteristics of a lease contract.

The lease contract should contain the details of the two parties, The term of the contract or the lease term, Type of the Lease, Lease Rentals, Residual value at the end of lease term and also the specification of the assets.

In the given case study we can see that the only about the interior and exterior of the Aircraft is mentioned in detailed in the contract, It misses out with the essentials of a Lease contract. So, we can say that this is not a lease contract.

Thank You...!

0 0
Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
A construction company enters into a contract with a customer to supply a new building. Control...
A construction company enters into a contract with a customer to supply a new building. Control over the completed building will pass to the customer in two years (the contractor’s performance obligation will be satisfied at a point in time). The contract contains two payment options. Either the customer can pay $ 5 million in two years when it obtains control of the building, or the customer can pay $ 4 million on inception of the contract. The customer decides...
On 1 March 2020, Pizza Attack, a pizza company enters into a contract with Goodman, a...
On 1 March 2020, Pizza Attack, a pizza company enters into a contract with Goodman, a shopping mall operator to use a space in the mall to sell its food and beverages for a five- year period. The contract states the amount of space at the specific store, Unit 118, for the first three years. During the first three years period, Goodman will substitute the leased space with another available space at the discretion of Goodman’s management on the 1st...
Sarasota Corp. enters into a contract with a customer to build an apartment building for $1,045,500....
Sarasota Corp. enters into a contract with a customer to build an apartment building for $1,045,500. The customer hopes to rent apartments at the beginning of the school year and provides a performance bonus of $139,800 to be paid if the building is ready for rental beginning August 1, 2021. The bonus is reduced by $46,600 each week that completion is delayed. Sarasota commonly includes these completion bonuses in its contracts and, based on prior experience, estimates the following completion...
ESTIMATING VARIABLE CONSIDERATION AJD BUILDERS CONSTRUCTION COMPANY ENTERS INTO A CONTRACT WITH A CUSTOMER TO BUILD...
ESTIMATING VARIABLE CONSIDERATION AJD BUILDERS CONSTRUCTION COMPANY ENTERS INTO A CONTRACT WITH A CUSTOMER TO BUILD A 50 KILOMETERS ROAD TO P100,000,000 WITH A PERFORMANCE BONUS OF P60,000,000 THAT WILL BE PAID BASED ON THE TIMING OF COMPLETION. THE AMOUNT OF THE PERFORMANCE BONUS DECREASES BY 10% PER WEEK FOR EVERY WEEK BEYOND THE AGREED-UPON COMPLETION DATE. THE CONTRACT REQUIREMENTS ARE SIMILAR TO CONTRACTS THAT AJD BUILDERS HAS PERFORMED PREVIOUSLY, AND MANAGEMENT BELIEVES THAT SUCH EXPERIENCE IS PREDICTIVE FOR THIS...
Mitchell corp enters into a contract with a customer to build an apartment building for 1,300,000....
Mitchell corp enters into a contract with a customer to build an apartment building for 1,300,000. The customer hopes to rent apartments at the beginning of the school year and provides a performance bonus of 190,000 to be paid if the building is ready for rental beginning August 1, 2019. The bonus is reduced by 62,000 each week that completion of work is delayed. Klava commonly includes these completion bonuses in its contracts and, based on prior experience, estimates the...
On January 1, 2017, Loud Company enters into a 2-year contract with a customer for an...
On January 1, 2017, Loud Company enters into a 2-year contract with a customer for an unlimited talk and 5 GB data wireless plan for $65 per month. The contract includes a smartphone for which the customer pays $299. Loud also sells the smartphone and monthly service plan separately, charging $649 for the smartphone and $65 for the monthly service for the unlimited talk and 5 GB data wireless plan. Required: 1. Calculate the transaction price for the smartphone and...
Sheridan Corp. enters into a contract with a customer to build an apartment building for $990,500....
Sheridan Corp. enters into a contract with a customer to build an apartment building for $990,500. The customer hopes to rent apartments at the beginning of the school year and provides a performance bonus of $147,300 to be paid if the building is ready for rental beginning August 1, 2018. The bonus is reduced by $49,100 each week that completion is delayed. Sheridan commonly includes these completion bonuses in its contracts and, based on prior experience, estimates the following completion...
On January 1, 2020, Pina Co. enters into a contract to sell a customer a wiring...
On January 1, 2020, Pina Co. enters into a contract to sell a customer a wiring base and shelving unit that sits on the base in exchange for $2,800. The contract requires delivery of the base first but states that payment for the base will not be made until the shelving unit is delivered. Pina identifies two performance obligations and allocates $1,120 of the transaction price to the wiring base and the remainder to the shelving unit. The cost of...
Case 1 A telecommunications operator (BarleyCo) enters into an indefeasible rights of use (IRU) contract with...
Case 1 A telecommunications operator (BarleyCo) enters into an indefeasible rights of use (IRU) contract with TomCo (the incumbent telecommunications operator) for a dark fiber route between two cities. The agreement is for a term of 19 years, which is the expected service life of the cable. The arrangement specifies the exclusive use of a distinct fiber within the TomCo fiber cable, and BarleyCo is responsible for the installation of transmission equipment in TomCo’s buildings in order to light the...
Question 3 - Revenue (20 marks) a) A telecommunications company enters into a contract with a...
Question 3 - Revenue a) A telecommunications company enters into a contract with a customer. Under the contract, the company promises to provide to the customer 4 GB data, 300 minutes of talk time, and 500 texts for $36. Required: Briefly explain how the telecommunications company should account for the contract under NZ IFRS 15. You need to refer to the relevant requirements but not to any specific paragraph of NZ IFRS 15. b) A company sells mobile phone sets...
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT