B-10.05 Problem

B-10.05 Problem - Depreciation of the leased asset is not...

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B-10.05 Evaluate the following features or comments and decide if the description would pertain to a capital lease or an operating lease. Operating Lease Capital Lease The lessee reports the leased asset on their balance sheet Payments are reported fully as rent expense Ownership of the property passes to the lessee by the end of the lease term The lease term is at least 75% of the remaining life of the property Interest expense is measured and reported by the lessee
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Unformatted text preview: Depreciation of the leased asset is not reported by the lessee At the inception of the lease, the lessee records both an asset and liability The lessee reports a liability for the present value of all future payments anticipated under the lease agreement The lessor continues to report the tangible asset covered by the lease on its balance sheet...
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