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Unformatted text preview: CHAPTER 15 Spiceland, Sepe, Nelson, and Tomassini – Fifth Edition LEASES Revised January 2010 LEARNING OBJECTIVES 1. Distinguish conceptually between a lease that is a rental of property (operating lease) and a lease that is an acquisition of property by financing (capital lease). 2. Identify and apply the criteria for classifying a lease, from the standpoint of the lessor, as a direct-financing lease, a sales-type lease, or an operating lease. 3. Identify and apply the criteria for classifying a lease, from the standpoint of the lessee , as either a capital lease or an operating lease. 4 . Compute the lessor's periodic lease payments for the following types of leases: (a) direct financing and (b) sales type leases. 5. Define the following: bargain purchase option, guaranteed residual value, and unguaranteed residual value. 6. Compute the lessor’s periodic lease payments when a lease agreement contains: (a) bargain purchase option, (b) guaranteed residual value, and (c) unguaranteed residual value. 6 . Compute the minimum lease payments related to a lease for both the lessor and the lessee. 7. Distinguish between the interest rate implicit in the lease and the lessee's incremental borrowing rate and explain how the lessee chooses the rate to use in determining the amount capitalized in the leased asset account. 8. Identify the situations in which the lessee should depreciate the leased asset over (a) the lease term or (b) the useful life of the leased asset. 9. Prepare amortization tables for both lessor and lessee in lease situations involving (a) ordinary annuities and (b) annuity dues. 10. Explain how the amortization tables in #9 differ for lessor and lessee in lease situations involving (a) a bargain purchase option, (b) unguaranteed residual value, (c) residual value guaranteed by the lessee, and (d) residual value guaranteed by a third party. 11. Prepare the journal entries required to account for a direct-financing lease, a sales-type lease, and an operating lease from the standpoint of the lessor . 1 12. Prepare the journal entries required to account for a capital lease and an operating lease from the standpoint of the lessee. 13. Show how the amounts and classification of accounts related to lease transactions are presented on the balance sheet, income statement, and statement of cash flows of both the lessor and lessee. 14. Identify and explain the situations that would result in asymmetric accounting for a lease by lessor and lessee . 15. Explain how the lessor accounts for executory costs and initial direct costs in situations involving a direct-financing lease, a sales-type lease, and an operating lease. 16. Prepare the journal entries required to account for a sale-leaseback transaction for both the lessor and lessee in situations involving both capital and operating leases....
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This note was uploaded on 02/15/2010 for the course MGMT 201 taught by Professor Aacc during the Spring '10 term at Anne Arundel CC.
- Spring '10