Quiz 18: Accounting for Leases
List Factors That Impact the Degree to Which This Agency
List factors that impact the degree to which this agency cost is a factor.
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What is the general criterion for deciding whether a lease is an operating or a finance lease?
Which statement is correct respecting the criteria for determining whether a lease is an operating or a finance lease? A)Substantially all of the risks and rewards of ownership have been transferred from the lessee to the lessor. B)There is a transfer of ownership to the lessee or a bargain purchase option (BPO)at the end of the lease. C)The lease term is a minor part of the economic life of the asset. D)The present value of the minimum lease payments comprises substantially 50% fair value of the leased asset.
The following are the characteristics of a lease:
Required: Determine the present value of minimum lease payments (MLP)and the appropriate classification of this lease for the lessee.
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