a. Prepare the journal entries for Salaur for 2019.
b. Repeat the requirements in part a., assuming Salaur has the option to purchase the system at the end of the lease for €100.
Analysis
Briefly discuss the impact of capitalizing this lease for two common ratios: return on assets and debt to total assets.
Principles
What fundamental quality of useful information is being addressed when a company like Salaur capitalizes all leases with terms of one year or longer?