Question
Noel Company leases 25 cell phones a year. The rent for the phones is $1,700 a month for 36 months ($61,200 in total). The fair
Noel Company leases 25 cell phones a year. The rent for the phones is $1,700 a month for 36 months ($61,200 in total). The fair value of the leased phones is $65,000. Noel's has an 5.5% incremental borrowing rate and the PV of the lease payments is $56,557.
Required:
a.How would Noel have recorded this transaction under SFAS No. 13?
b.How should Noel record this transaction under FASB ASC 842?
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Managerial Accounting Tools For Business Decision Making
Authors: Jerry J. Weygandt, Paul D. Kimmel, Donald E. Kieso, Ibrahim M. Aly
2nd Canadian Edition
