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

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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;
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nd the amount of financing amount required for the purchase and ownership. So there will always be lo
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This note was uploaded on 04/14/2011 for the course ACCT 3202 taught by Professor Kenmichael during the Spring '11 term at University of Minnesota Duluth.

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

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