Write a short essay to answer the following questions on Accounting for Leases. Q1) If the...

 

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Write a short essay to answer the following questions on Accounting for Leases. Q1) If the lessee applies capitalization for a lease, it then needs to recognize a Right-of-Use Asset and Lease Liability at the commencement of the lease on its books. How to determine the initial balance (or balances) of the Right-of-Use Asset and Lease Liability? Q2) Briefly explain the lease classification for lessor accounting. Q3) If a lease is classified as a sales-type lease, what journal entry or entries should be prepared by the lessor at the commencement of the lease? Explain the rationale behind. Q4) The residual value is the estimated fair value of the leased asset at the end of the lease term. (a) of what significance is (1) an unguaranteed and (2) a guaranteed residual value in the lessee's accounting? (b) of what significance is (1) an unguaranteed and (2) a guaranteed residual value in the lessor's accounting for a finance (sales-type) lease transaction? Write a short essay to answer the following questions on Accounting for Leases. Q1) If the lessee applies capitalization for a lease, it then needs to recognize a Right-of-Use Asset and Lease Liability at the commencement of the lease on its books. How to determine the initial balance (or balances) of the Right-of-Use Asset and Lease Liability? Q2) Briefly explain the lease classification for lessor accounting. Q3) If a lease is classified as a sales-type lease, what journal entry or entries should be prepared by the lessor at the commencement of the lease? Explain the rationale behind. Q4) The residual value is the estimated fair value of the leased asset at the end of the lease term. (a) of what significance is (1) an unguaranteed and (2) a guaranteed residual value in the lessee's accounting? (b) of what significance is (1) an unguaranteed and (2) a guaranteed residual value in the lessor's accounting for a finance (sales-type) lease transaction?

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Q1 Determining Initial Balance of RightofUse Asset and Lease Liability for Lessee When a lessee applies capitalization for a lease the initial balance ... View the full answer