Oa The Lessee recognizes a single Lease Expense on the Income Statement for a Finance Type Lease. Ob Under an Operating Lease, the Lessor records each Lease Payment Receipt as part Interest Revenue and part Lease Revenue. Oe Under an Operating Lease, the Lessot reports a Lease Receivable Asset on their Balance Sheet equal to the present value of Lease payments plus the present value of a Ren d A Lessee reports Interest Expense on al e but not on an Operating Lease Oe Both a Guaranteed and Unguaranteed Residual Value affect the Lessee's computation of amounts capitalized as a Leased Asset

Oa The Lessee recognizes a single Lease Expense on the Income Statement for a Finance Type Lease. Ob Under an Operating Lease, the Lessor records each Lease Payment Receipt as part Interest Revenue and part Lease Revenue. Oe Under an Operating Lease, the Lessot reports a Lease Receivable Asset on their Balance Sheet equal to the present value of Lease payments plus the present value of a Ren d A Lessee reports Interest Expense on al e but not on an Operating Lease Oe Both a Guaranteed and Unguaranteed Residual Value affect the Lessee's computation of amounts capitalized as a Leased Asset

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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In an operating lease, the: Multiple Choice lessor records interest revenue. lessee records an asset and a liability for the present value of lease payments. lessor records a receivable for the present value of lease payments. lessee records an asset and a liability for the total of the lease payments.
When a lessor receives cash on an operating lease, which of the following accounts is increased? A. Lease Payable B. Interest Revenue: Leases C. Lease Receivable D. Rent Revenue
A lease agreement whereby the lessee recognized rent expense which is always equals to the rent income recognized by the lessor at a given period of time. A. Operating lease B. Finance lease C Terminating lease D. Sale type lease
An amount paid by the lessee to the lessor in addition to the periodic rental which is treated by the lessor as an unearned rent income to be amortized over the lease term. a. Contingent rent b. Lease bonus c. Initial direct cost d. Security deposit
Which of the following is not correct statement for accounting by the lessee? The lessee records depreciation expense on the right-of-use asset. O b. The lessee recognizes interest expense on the lease liability over the lease term O c. The lease liability is computed as the present value of the lease payments. O d. The operating lease method is used to account for the lease.
A lease qualifies as a finance (sales-type) lease. Indicate an account to be used by the lessee, and an account to be used by the lessor Select one: Account to be used by the lessee Right of Use Asset Account to be used by the lessor Lease Receivable a. Ob. Account to be used by the lessee Unearned Revenue Account to be used by the lessor Sales Revenue Account to be used by the lessee Lease Expense Account to be used by the lessor Interest Revenue d. Account to be used by the lesseO Lease Liability Account to be used by the lessor Amortization Expense Account to be used by the lessee Amortization Expense Account to be used by the lessor Interest Expense e.
A lessee records a lease obligation with a credit to the obligation in the amount of a. the total amount of the rental payments and other payments that are probable to occur b. the present value of the rental payments only c. the total amount of the rental payments only d. the present value of the rental payments and other payments that are probable to occur
When a lessee makes periodic cash payments for a finance lease, which of the following accounts is increased? A.Lease Liability B.Lease Rental Expense C.Right-of-Use Asset D.Interest Expense
A lease agreement whereby the lessee recognized rent expense which is always equal to the rent income recognized by the lessor at a given period of time. Group of answer choices Terminating lease Operating lease Finance lease Sale type lease
Payments on an operating lease will appear: A. In the profit and loss account as an expense B. In the balance sheet as a fixed asset. C. In the balance sheet as along as a long term creditor. D. In the profit and account as a non-trading revenue.
The rent expense of the lessee maybe composed of the following:I. Straight-line amortization of total rental payments over the lease term plus any free rent.II. Straight-line amortization of lease bonus paid by the lessee at inception of the lease.III. Any contingent rent accrued to the lessor as part of lease agreement. I and III only I and II only II and III only I, II, and III
The difference of gross investment in the lease and net investment in the lease of the lessor is? A. Total amount of interest that the lessee shall recognized as interest expense over the lease term. B. Interest income at inception of the lease. C. Total amount of interest that the lessor shall recognized as interest income over the lease term. D. Initial direct cost.