Doherty Company leased equipment from Lambert Company. The classifica tion of the lease makes a difference in
Question:
Doherty Company leased equipment from Lambert Company. The classifica¬ tion of the lease makes a difference in the amounts reflected on the balance sheet and income statement of both Doherty and Lambert.
Required:
a. What criteria must be met by the lease in order that Doherty Company classifies it as a capital lease?
b. What criteria must be met by the lease in order that Lambert Company classify it as a sales-type or direct financing lease?
c. Contrast a sales-type lease with a direct financing lease.
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Related Book For 
Financial Accounting Theory And Analysis Text And Cases
ISBN: 9780470128817
9th Edition
Authors: Richard G. Schroeder, Myrtle W. Clark, Jack M. Cathey
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