CH. 11 - Accounting for Leases

Question 1

Monthly Expense formula

Answer 1

Total Lease Payments / Months in Lease Terms

Question 2

________________ the lessee records a right-of-use asset and a corresponding lease liability.

Answer 2

Operating Lease

Question 3

Five Characteristics of a Finance Lease (Special-PO-T-75-90)

Answer 3

1) Specialized Nature
2) Purchase Option reasonably certain to be exercised
3) Transfer Title
4) Major Part (75%)
5) Substantially All (90%)