However if the amount determined exceeds the fair

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Unformatted text preview: as a capital lease because the lease contains a bargain purchase option. • Lease L should be classified as an operating lease because it does not meet any of the four criteria for classifying a lease as a capital lease. b. Borman records the following liability amounts at inception: • For Lease J, Borman records as a liability at the inception of the lease an amount equal to the present value at the beginning of the lease term of minimum lease payments during the lease term, excluding that portion of the payments representing executory costs such as insurance, maintenance, and taxes to be paid by the lessor, including any profit thereon. However, if the amount determined exceeds the fair value of the • • equipment at the inception...
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This document was uploaded on 03/05/2014 for the course FMIS 3619 at University of Minnesota Duluth.

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