On January 1, 2020, Perriman Company transferred equipment for cash and leased it back. As seller-lessee, Perriman
Question:
On January 1, 2020, Perriman Company transferred equipment for cash and leased it back. As seller-lessee, Perriman retained the right to substantially all of the remaining use of the equipment. The term of the lease is 8 years.
Instructions
a. What is the major issue related to sale-leaseback accounting?
b. 1. How should Perriman account for the sale portion of the sale-leaseback transaction at January 1, 2020?
2. How should Perriman account for the leaseback portion of the sale-leaseback transaction at January 1, 2020?
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a The major accounting issue is whether the transaction is a sale or a financing ...View the full answer
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Related Book For 
Intermediate Accounting
ISBN: 978-1119503668
17th edition
Authors: Donald E. Kieso, Jerry J. Weygandt, Terry D. Warfiel
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