Which of the following is not included in the lease payments for the purpose of computing the lease liability? A. Fixed payments less any lease incentives receivable B. Variable lease payments that depend on an index or a rate, initially measured using the index or rate as at the commencement date C. Guaranteed residual value D. Contingent rent based on level of sales

Which of the following is not included in the lease payments for the purpose of computing the lease liability? A. Fixed payments less any lease incentives receivable B. Variable lease payments that depend on an index or a rate, initially measured using the index or rate as at the commencement date C. Guaranteed residual value D. Contingent rent based on level of sales

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter20: Accounting For Leases

Section: Chapter Questions

Problem 13GI: What is the basic difference between the accounting procedures used by a lessor for a sales-type...

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It is that portion of the lease payments that is not fixed in amount but isbased on a factor other than just the passage of time, for example,percentage of sales, amount of usage, price index and market rate ofinterest A. Variable rentB. Contingent rentC. Bargain purchase optionD. Executory cost
Which of the following does not affect the computation of the rental income/expense under an operating lease? Contingent rent Lease bonus Security deposits Rental payments
When a lessor receives cash on a sales-type lease, which of the following accounts is decreased? A. Lease Receivable B. Interest Revenue: Leases C. Unearned Interest: Leases D. Lease Rental Revenue
The rent expense of the lessee maybe composed of the following:I. Straight-line amortization of total rental payments over the lease term plus any free rent.II. Straight-line amortization of lease bonus paid by the lessee at inception of the lease.III. Any contingent rent accrued to the lessor as part of lease agreement. Group of answer choices I and III only II and III only I and II only I, II, and III
What is the reason for excluding variable lease payments from the measurement of the lessee’s lease liability and the lessor’s receivable?
When a lessor receives cash on an operating lease, which of the following accounts is increased? A. Lease Payable B. Interest Revenue: Leases C. Lease Receivable D. Rent Revenue
Which of the following payment/s is/are included along with lease liability? a- All of them b- Payments under residual value guarantees c- Variable payments d- Fixed payments
Lease payments under an operating lease shall be recognized as an expense in the income statement on? a diminishing balance basis cash basis a sum of units basis a straight line basis over the lease term unless another systematic basis provides more reliable financial information
The rent expense of the lessee maybe composed of the following:I. Straight-line amortization of total rental payments over the lease term plus any free rent.II. Straight-line amortization of lease bonus paid by the lessee at inception of the lease.III. Any contingent rent accrued to the lessor as part of lease agreement. I and III only I and II only II and III only I, II, and III
The rent expense of the lessee maybe composed of the following:I. Straight-line amortization of total rental payments over the lease term plus any free rent.II. Straight-line amortization of lease bonus paid by the lessee at inception of the lease.III. Any contingent rent accrued to the lessor as part of lease agreement. A. I and III only B. I, II, and III C. II and III only D. I and II only
Which of the following statements is true about initial direct costs? A. Initial direct costs of a sales-type lease should be expensed at the commencement of the lease only if no selling profit or loss has been incurred. B. Initial direct costs are ownership-type costs such as insurance, maintenance, and taxes. C. Initial direct costs of an operating lease should be recorded by the lessor as a prepaid asset. D. Initial direct costs should always be debited against income by the lessor in the period of the inception of the lease.
What nonlease costs might be included as part of lease payments? How are they accounted for by the lessee in a finance lease when paid by the lessee? When paid by the lessor? Explain.