2.

We classify a lease as a finance lease if:

Multiple Choice

• the lessee obtains control of the use of the asset.

• the usual risks and rewards are retained by the lessor.

• the present value of lease payments is less than the asset's book value.

• the present value of lease payments is less than the asset's fair value.

3.

From the perspective of the lessee, leases may be classified as either:

Multiple Choice

• Sales-type or operating.

• Finance or operating.

• Finance or sales-type without selling profit.

• Sales-type without selling profit or sales-type with selling profit.

4.

In a finance lease:

Multiple Choice

• the lessee records an asset and a liability for the total of the lease payments.

• the lessee records an asset and a liability for the present value of lease payments.

• the lessor records an asset and a liability for the present value of lease payments.

• the lessor records an asset and a liability for the total of the lease payments.

5.

A Co. recorded a right-of-use asset of $400,000 in a 10-year operating lease. Payments of $65,100 are made annually at the end of each year. The interest rate charged by the lessor was 10%. The balance in the right-of-use asset after the first year will be:

rev: 01_07_2020_QC_CS-194706

Multiple Choice

• $376,900.

• $360,000.

• $374,900.

• $400,000.

Harrison Forklift's pension expense includes a service cost of $29 million. Harrison began the year with a pension liability of $49 million (underfunded pension plan). 1. Interest cost, $10; expected return on assets, $23; amortization of net loss, $6. 2. Interest cost, $25; expected return on assets, $19; amortization of net gain, $6. 3. Interest cost, $25; expected return on assets, $19; amortization of net loss, $6; amortization of prior service cost, $7 million. Required: Prepare the appropriate general journal entries to record Harrison's pension expense in each of the above independent situations regarding the other (non-service cost) components of pension expense ($ in millions): (If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Enter your answers in millions (i.e., 10,000,000 should be entered as 10).) View transaction list Journal entry worksheet