Question

LEASES (1) From the perspective of a lessee, all leases may be classified as operating or...

LEASES (1) From the perspective of a lessee, all leases may be classified as operating or financing lease. If you are a controller for American airlines (the lessee), what would you consider for a lease to be recorded as a finance lease as opposed to an operating lease? Please provide your answer using three paragraphs. (2) From the perspective of a lessor, leases may be classified as operating, sales-type lease, or direct financing lease. If you are a controller for Boeing (the lessor), what would you consider for a lease to be recorded as a sales-type lease or a direct finance lease as opposed to an operating lease? Please provide your answer using three paragraphs.

Business   Accounting   
0 0
Add a commentTranscribed image text
Next >

Homework Answers

Answer #1

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
Discuss and answer at least two of the questions listed below in detail. 1. How does...
Discuss and answer at least two of the questions listed below in detail. 1. How does the residual value impact the classification of minimum rental payments by the Lessor and the computation of the amount to be capitalized by the Lessee? How do the Lessor and Lessee account for depreciation under operating and capital leases? 2. What are the disclosure requirements of Leases for both the Lessee and Lessor? See the airlines industry for examples. 3. Explain the distinction between...
1. The methods of accounting for a lease by a lessee are a. operating and sales-type...
1. The methods of accounting for a lease by a lessee are a. operating and sales-type lease methods. b. operating and finance lease methods. c. operating and direct financing lease methods. d. none of these answers are correct.     2.     In computing the present value of the lease payments, the lessee should a.   use its incremental borrowing rate in all cases. b.   use both its incremental borrowing rate and the implicit rate of the lessor, assuming that the implicit rate...
Lessee leased a machine from Lessor under a 10-year, noncancelable lease. The transaction was properly classified...
Lessee leased a machine from Lessor under a 10-year, noncancelable lease. The transaction was properly classified as a finance lease, and a right-of-use asset and a lease liability of $100,000 were recorded. The $14,900 annual payments made at the end of each lease period were discounted at 8% implicit interest to derive the initial $100,000 amounts. Lessee should record the following interest expense at the end of Years 1 and 2: Please show solution Year 1 Year 2 A. $8,000...
Pharoah Company leases a building to Shamrock, Inc. on January 1, 2020. The following facts pertain...
Pharoah Company leases a building to Shamrock, Inc. on January 1, 2020. The following facts pertain to the lease agreement. 1. The lease term is 5 years, with equal annual rental payments of $4,910 at the beginning of each year. 2. Ownership does not transfer at the end of the lease term, there is no bargain purchase option, and the asset is not of a specialized nature. 3. The building has a fair value of $23,500, a book value to...
Case 13-2 Lessee and Lessor Accounting for lease (Modified) On January 2, 2020, Grant Corp. leases...
Case 13-2 Lessee and Lessor Accounting for lease (Modified) On January 2, 2020, Grant Corp. leases an asset to Pippin Corp. under the following conditions (Assume new lease accounting standard (ASC 842) are effective for both companies).     1. Annual lease payments are $10,000 for 20 years. 2. At the end of the lease term, the asset is expected to have a value of $2,750. 3. The fair value of the asset at the inception of the lease is $92,625...
Tendai Inc. sells computer systems. Tendai leases computers to John company on January 1, 2020. the...
Tendai Inc. sells computer systems. Tendai leases computers to John company on January 1, 2020. the manufacturing cost of the computers was $12 million. This non-concealable lease had the following terms: * Lease payments : $2,125,000 semiannually , first payment at January 1,2020, remaining payments at June 30 and December 31 each year through jump 30,2022. * Lease term : 3 years (6 semi-annual payments) * No residual value; no bargain purchase option * Economic life of equipment : 5...
Company A leased new equipment from Lessor Corp. on January 1, 2017, for a period of...
Company A leased new equipment from Lessor Corp. on January 1, 2017, for a period of three years. Lease payments of $100,000 are due to Lessor Corp. each year with the first payment due on January 1, 2017. The annual lease payment includes $2,000 per year designated to cover maintenance costs associated with the equipment. The lease contains no purchase or renewal options and the equipment reverts to Lessor Corp. on the expiration of the lease. The remaining useful life...
Crane Corp. is a manufacturer of truck trailers. On January 1, 2021, Crane Corp. leases 10...
Crane Corp. is a manufacturer of truck trailers. On January 1, 2021, Crane Corp. leases 10 trailers to Bramble Company under a 5-year noncancelable lease agreement. The following information about the lease and the trailers is provided: 1. Equal annual payments that are due on January 1 each year provide Crane Corp. with an 9% return on net investment. 2. Titles to the trailers pass to Bramble at the end of the lease. 3. The fair value of each trailer...
Please answer 1-5! 1.On 1/1/17 CherryCoke from Corp., to $40,000 at the end of each year...
Please answer 1-5! 1.On 1/1/17 CherryCoke from Corp., to $40,000 at the end of each year (beginning 12/31/17) for 10 years. The lease is cancelable at any time and is designated as an operating lease. Cherry Coke Zero reports on an annual basis every December 31. Which of the following accounts will Cherry Coke Zero (the lessee) debit at the time of the first interest payment (12/31/17)? Leased equipment b.      Cash c.       Rent Expense d.      Depreciation Expense e.       Interest Expense...
Do the following problems. 1. Each of three barrels from a manufacturing line are classified as...
Do the following problems. 1. Each of three barrels from a manufacturing line are classified as either above (a) or below (b) the target weight. Provide the ordered sample space. 2. The heat on each of two soldered parts is measured and labeled as either low (l), medium (m), or high (h). State the number of elements in the ordered sample space. 3. Consider the set of Beatles songs with a primary writer as either Paul McCartney (P) or John...
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT