1. In the PWC document, there are several examples. Go to Chapter 4 and redo the journal entries for Example 4-2 (day one) and 4-11 (day two) using an incremental borrowing rate of 5%. Do the same for Example 4-4 (day one) and 4-13 (day two) also using IBR% of 5%. The PWC document is called PWC lease document 2018.12 in Blackboard. You can access the video links loaded for another look at what we saw during class.
2. Define finance leases and operating leases. Include what criterion (theres a list and includes things like ownership is transferred at the end of the lease) is used to determine whether a lease is a finance or an operating lease. (Look to ASC 842).
3. From the lessors standpoint (the one leasing to someone else), what are the important criteria to determine the accounting treatment (Look to ASC 842)?
4. What are the main accounting treatment differences between the Lessors types of leases (Look to ASC 842)?
5. Describe the thought process and considerations involved when a contract involves multiple deliverables (product and service; two difference services, etc). In other words, when do you treat the contract as a single combined sale and when might you have separate accounting for components of the contract?