1Lessor Co. entered into two contract leases. Lease #1 transfers substantially all the risks and rewards incidental to ownership of the leased asset. Lease #2 does not transfer substantially all the risks and rewards incidental to ownership of the leased asset. How should Lessor Co. classify the leases? (Lease #1); (Lease #2)

Finance, Finance

Operating, Finance

Finance, Operating

Operating, Operating

2All are not examples of Nonfinancial liabilities except

Income tax payable

Estimated liability on warranty expense

Estimated liability on premium expense

Bonds payable

3EDSA Company borrowed from BDO 5,000,000 on a 12% 5 year interest bearing note on January 1, 2021 . The entity received 4,000,000.00 which is the fair value of the note on January 1, 2021. The transaction cost of 100,000 was paid by the entity. The fair value of the note payable was 3,500,000 on December 31, 2021. The entity has elected irrevocably the fair value option for measuring the note payable. The change in fair value comprised 50,000 attributable to credit risk and 100,000 attributable to interest risk, 150,000 to market risk , and 200,000 to price risk. What amount should be reflected in OCI and profit loss in the financial statement?

OCI 50,000 Profit or Loss 450.000

OCI 200,000 Profit or Loss 300.000

OCI 150,000 Profit or Loss 350.000

OCI 300,000 Profit or Loss 200.000

4A company is legally obligated for the costs associated with the retirement of a long-lived asset

only when the obligation arises at the outset of the asset's use.

only if it performs the activities with its own workforce and equipment

only when it hires another party to perform the retirement activitie

whether it hires another party to perform the retirement activities or performs the activities itself

5In a debt extinguishment in which the debt is continued with modified terms and the carrying value of the debt is more than the fair value of the debt

no interest expense should be recognized in the future.

a loss should be recognized by the debtor

a new effective-interest rate must be computed

a gain should be recognized by the debtor

6Statement 1: Bond Refinancing is the floating of new bonds the proceeds from which are used in paying the original bonds. Statement 2: Treasury bonds are an entity's own bonds originally issued and reacquired but canceled. Statement 3: Bond refinancing shall be accounted for as an extinguishment of financial liability.

All statements are true

None of the statements are true

Only 2 statements are true

only 1 statement is true