Noel Company leases 25 cell phones for three years. The rent for the phones is $1,700 a
Question:
Noel Company leases 25 cell phones for three years. The rent for the phones is $1,700 a month for 36 months ($61,200 in total). The fair value of the leased phones is $65,000. Noel’s has an 5.5% incremental borrowing rate and the PV of the lease payments is $56,557.
Required:
a. How would Noel have recorded this transaction under SFAS No. 13?
b. How should Noel record this transaction under FASB ASC 842?
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a Under SFAS No 13 Noel would have recorded the lease as a capital lease since the present value of ...View the full answer
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Related Book For 
Financial Accounting Theory And Analysis Text And Cases
ISBN: 9781119577775
13th Edition
Authors: Richard G Schroeder, Myrtle W Clark, Jack M Cathey
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