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Based solely upon the following sets of circumstances indicated below, which set gives rise to a sales-type or direct-financing lease of a lessor? For a
Based solely upon the following sets of circumstances indicated below, which set gives rise to a sales-type or direct-financing lease of a lessor? For a capital lease, an amount equal to the present value of the minimum lease payments should be recorded by the lessee as a(n): A. Expense B. Asset and a different amount should be recorded as a liability. C. Liability and a different amount should be recorded as an asset. D. Asset and a liability The four criteria provided in GAAP for distinguishing a capital lease from an operating lease do not include: A. The collectibility of the lease payments must be reasonably predictable B. The agreement specifies that ownership transfers at the end of the lease term. C. The agreement contains a bargain purchase option. D. The noncancelable lease term is 75% or more of the useful life of the leased asset. In computing the annual lease payments, the lessor deducts not only a guaranteed residual value from the fair market value of a leased asset. TRUE FALSE When the lessee agrees to make up any deficiency below a stated amount that the lessor realizes in residual value, that stated amount is the unguaranteed residual value. TRUE FALSE The sales-type lease has both interest revenue and profit revenue. TRUE FALSE A lease that contains a bargain purchase option must be capitalized by the lessee. TRUE FALSE Executory costs should be included by the lessee in computing the present value of the minimum lease payments. TRUE FALSE A capitalized leased asset is always depreciated over the economic life of the asset by the lessee TRUE FALSE A deferred tax liability represents the increase in taxes payable in future years as result of taxable temporary differences existing at the end of the current year. TRUE FALSE Deductible amounts cause taxable income to be greater than pretax financial income in
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