Quiz 15.111 – Classification of Lease with a Purchase Option
Intermediate Accounting
Spiceland, Nelson, and Thomas
10th Edition
What happens when it is “reasonably certain” that the lessee will exercise a purchase option?
What happens when it is “reasonably certain” that the lessee will exercise a purchase option?
What must the amortization period used by the lessee be for a right-of-use asset that qualifies as a finance lease due to the presence of a purchase option that is reasonably certain to be exercised?
What is the term used for a lessee’s option to purchase a leased asset at a discounted price?
How does a lessee account for the expected transfer of ownership in a lease agreement with a purchase option or at the end of the lease term?
Based on Reagan Inc.’s lease agreement and the provided lease amortization schedule, what is the classification of Reagan’s position in this lease?
How can leases be classified from the perspective of the lessor?
How does the presence of a residual value affect the amount to be recovered by the lessor in a lease agreement where the lessor retains title to the property?
How should a lessee-guaranteed residual value be accounted for in finance lease payments?
What is the correct way to account for a lessee-guaranteed residual value on assets and liabilities at the beginning of a lease, assuming the guaranteed residual value is expected to exceed the estimated residual value?
What is the obligation of the lessor and the lessee in case the residual value of a leased asset turns out to be more than the amount guaranteed by the lessee?