On January 1, 2014, Von Company entered into two noncancelable leases for new machines to be used
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a. What is the theoretical basis for requiring lessees to capitalize certain long- term leases? Do not discuss the specific criteria for classifying a lease as a capital lease.
b. How should a lessee account for a capital lease at its inception?
c. How should a lessee record each minimum lease payment for a capital lease?
d. How should Von classify each of the two leases? Why?
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Related Book For
Financial Accounting Theory and Analysis Text and Cases
ISBN: 978-1118582794
11th edition
Authors: Richard G. Schroeder, Myrtle W. Clark, Jack Cathey
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