Presented below are three different aircraft lease transactions that occurred for Western Airways in 2014. All the leases start on January 1, 2014. In no case does Western receive title to the aircraft during or at the end of the lease period; nor is there a bargain purchase option.
Instructions
(a) Which of the above leases are operating leases and which are finance leases? Explain your answer.
(b) How should the lease transaction with Utah Insurance be recorded in 2014?
(c) How should the lease transaction with Laine Leasing be recorded in 2014?

Question

Presented below are three different aircraft lease transactions that occurred for Western Airways in 2014. All the leases start on January 1, 2014. In no case does Western receive title to the aircraft during or at the end of the lease period; nor is there a bargain purchase option.  
Instructions
(a) Which of the above leases are operating leases and which are finance leases? Explain your answer.
(b) How should the lease transaction with Utah Insurance be recorded in 2014?
(c) How should the lease transaction with Laine Leasing be recorded in 2014?

Quizplus · Accepted Answer

The Answer of Presented below are three different aircraft lease transactions that occurred for Western Airways in 2014. All the leases start on January 1, 2014. In no case does Western receive title to the aircraft during or at the end of the lease period; nor is there a bargain purchase option.  
Instructions
(a) Which of the above leases are operating leases and which are finance leases? Explain your answer.
(b) How should the lease transaction with Utah Insurance be recorded in 2014?
(c) How should the lease transaction with Laine Leasing be recorded in 2014?

Presented Below Are Three Different Aircraft Lease Transactions That Occurred