chapter 21 final - Chapter 21 Part 1 Homework-complete...

Info icon This preview shows pages 1–3. Sign up to view the full content.

View Full Document Right Arrow Icon
2) a) leasing can be easier to agree upon than the purchase of a bond Leasing permits 100 percent financing of assets There can be more tax advantages b) interest rates are usually higher than of actual purchasing c) there is no real difference between the amount of money that will be paid for leasing a commitment an 3) There is the operating method where the lease asset remains the property of the lessor with the paymen In the capital lease method, the lessee treats the lease transaction like an asset being purchased on cre 4) the accounting method that should be used is to record the lease payments as they are paid and to alloc 7) under the Operating methods, a lease accrues on a daily basis to the lessee as the property is used and 8) Under the capital lease method, the rent expense is treated as if it were being purchased on installment 14) The lease agreement between Alice Foyle and Brownack Realty is like a purchase of property because And the lessor makes some money from the rates of return on investment. They should be recorded at the discounted amount of the future lease payments with that amount being BE-1 It should be classified as a capital lease BE-2 Leased equipment under capital leases 150,000 lease liability 150,000 lease liability 43,019 cash 43,019 BE-3 Interest expense 29,530 interest payable $29,529.60 depre expense 37,500 acc depre 37500 BE-4 interest payable 29530 lease liability 24390 cash 53920 Chapter 21 Part 1 Homework -complete questions 2,3,4,7,8,14; Brief Exercises 1,2,3,4;
Image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full Document Right Arrow Icon
nd the amount of financing amount required for the purchase and ownership. So there will always be lo
Image of page 2
Image of page 3
This is the end of the preview. Sign up to access the rest of the document.

{[ snackBarMessage ]}

What students are saying

  • Left Quote Icon

    As a current student on this bumpy collegiate pathway, I stumbled upon Course Hero, where I can find study resources for nearly all my courses, get online help from tutors 24/7, and even share my old projects, papers, and lecture notes with other students.

    Student Picture

    Kiran Temple University Fox School of Business ‘17, Course Hero Intern

  • Left Quote Icon

    I cannot even describe how much Course Hero helped me this summer. It’s truly become something I can always rely on and help me. In the end, I was not only able to survive summer classes, but I was able to thrive thanks to Course Hero.

    Student Picture

    Dana University of Pennsylvania ‘17, Course Hero Intern

  • Left Quote Icon

    The ability to access any university’s resources through Course Hero proved invaluable in my case. I was behind on Tulane coursework and actually used UCLA’s materials to help me move forward and get everything together on time.

    Student Picture

    Jill Tulane University ‘16, Course Hero Intern