Question
Noel Company leases 25 cell phones for three years. The rent for the phones is $1,700 a month for 36 months ($61,200 in total). The
Noel Company leases 25 cell phones for three years. 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:
- How would Noel have recorded this transaction underSFAS No. 13?
- How should Noel record this transaction under FASB ASC 842?
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Cost-Benefit Analysis Concepts and Practice
Authors: Anthony E. Boardman, David H. Greenberg, Aidan R. Vining, David L. Weimer
5th edition
1108401295, 9781108415996, 1108415997, 978-1108401296
