A sale and leaseback arrangement does which one of the following?Select one:O a. allows the lessor to continue using the leased asset without anyinterruptionsO b. provides the lessee with an immediate cash inflow equivalent to the initiallease paymentO c. allows the lessee to generate cash while continuing to have use of the assetO d. provides the lessor with an immediate cash inflow equivalent to the marketvalue of the leased assetO e. allows the lessee to retain title of the asset

Sale and leaseback transactions: under this transaction the lessor sold the goods to the lessee and…

A sale and leaseback arrangement does which one of the following? Select one: O a. allows the lessor to continue using the leased asset without any interruptions O b. provides the lessee with an immediate cash inflow equivalent to the initial lease payment O. allows the lessee to generate cash while continuing to have use of the asset O d. provides the lessor with an immediate cash inflow equivalent to the market value of the leased asset O e. allows the lessee to retain title of the asset

A sale and leaseback arrangement does which one of the following? Select one: O a. allows the lessor to continue using the leased asset without any interruptions O b. provides the lessee with an immediate cash inflow equivalent to the initial lease payment O. allows the lessee to generate cash while continuing to have use of the asset O d. provides the lessor with an immediate cash inflow equivalent to the market value of the leased asset O e. allows the lessee to retain title of the asset

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter20: Accounting For Leases

Section: Chapter Questions

Problem 14GI: Why are compound interest concepts appropriate and applicable in accounting for a sales-type lease?

See similar textbooks

Similar questions

1. In a sale and leaseback transaction, what is used by the buyer-lessor to depreciate the cost of the leased asset? A. Lease term B. Total Useful life C. Excess of useful life over the lease term D. Remaining useful life 2. Which of the following scenarios regarding a sale and leaseback transaction would result to a loss to the seller-lessee? A. Fair Value < Carrying Amount B. Sale Price < Fair Value C.Sale Price > Fair Value D.Fair Value > Carrying Amount 3. When does a buyer-lessor recognize a financial asset from a sale and leaseback transaction? A. Sale Price > Fair Value B. Fair Value < Carrying Amount C. Sale Price < Fair Value D. Fair Value > Carrying Amount
The buyer-lessor recognizes the asset from a sale and leaseback transaction resulting to a finance lease at? carrying amount sale price the lower of the sale price and fair value fair value
When does a buyer-lessor recognize a financial asset from a sale and leaseback transaction? Fair Value > Carrying Amount Fair Value < Carrying Amount Sale Price > Fair Value Sale Price < Fair Value
Which of the following scenarios regarding a sale and leaseback transaction would result to a loss to the seller-lessee? Fair Value < Carrying Amount Fair Value > Carrying Amount Sale Price < Fair Value Sale Price > Fair Value
The amount of gain (loss) on sale and leaseback transaction is: Group of answer choices The difference of the fair value of rights retained by the lessee and the carrying value of right-of-use asset. The difference of the fair value of rights transferred to the lessor and carrying value of rights transferred to the lessor. The difference of fair value and carrying of the underlying asset. The difference of the fair value of rights retained by the lessee and the carrying value of rights transferred to the lessor.
In a sale-leaseback transaction, the right-of-use asset is computed as: Group of answer choices Carrying value of the asset multiplied by the FV of rights retained by the lessee divided by fair value of the asset. Lease liability multiplied by useful life divided by total fair value of the asset. FV of rights retained by the lessee multiplied FV of the asset divided by carrying value of the asset. Rights retained by the lessor multiplied by rights retained by the lessee divided by FV of the asset.
Why are compound interest concepts appropriate and applicable in accounting for a sales-type lease?
A(n) is a contract for the use of an asset for a period of time without having to buy the asset. Oa. indenture Ob. revenue option Oc. lease Od. depreciation hedge
In a sale-leaseback transaction, the right-of-use asset is computed as: a. Rights retained by the lessor multiplied by rights retained by the lessee divided by FV of the asset. b. Carrying value of the asset multiplied by the FV of rights retained by the lessee divided by fair value of the asset. c. Lease liability multiplied by useful life divided by total fair value of the asset. d. FV of rights retained by the lessee multiplied FV of the asset divided by carrying value of the asset.
For a(n) ________ lease, a lessor recognizes revenue on the sale and records the asset, ________ lease. It also removes the leased asset from its accounts and records the ________. Group of answer choices sales-type; net investment in lease–sales-type; cost of goods sold finance; gross investment in lease–sales-type; cost of goods sold operating; net investment in lease–sales-type; cost of goods sold sales-type; finance; revenue
Which of the following statements is true? Group of answer choices The right-of-use asset is increased by prepaid lease payments and the lessee's initial direct costs, but reduced by lease incentives. The right-of-use asset is increased by prepaid lease payments, but reduced by lease incentives and the lessee's initial direct costs. The right-of-use asset is reduced by the lessee's initial direct costs, but increased by lease incentives and prepaid lease payments. The right-of-use asset is reduced by prepaid lease payments and the lessee's initial direct costs, but increased by lease incentives.
Which of the following cash flows is classified as an investing cash flow? A. interest portion of payment received under a direct financing lease B. reduction of a direct financing lease receivable C. purchase of an asset leased under a sales-type lease D. payment received under an operating lease