On January 1, 2017, Quong Corporation (the lessee) entered into a four-year, non-cancellable equipment lease contract with

Question:

On January 1, 2017, Quong (the lessee) entered into a four-year, non-cancellable equipment lease contract with Zareiga Inc. (the lessor). The present value of the minimum lease payments required was $116,025. Also at lease inception, it was estimated that the equipment's economic life was eight years, and that its fair value was $150,000. The lease does not transfer title or contain a bargain purchase option and it is not for specialized equipment.
(a) Assume that Quong follows IFRS 16. How should Quong set up this lease?
(b) Assume that Quong follows ASPE. How should Quong classify this lease?
(c) Assume that Quong follows IAS 17. How should Quong account for this lease?
Corporation
A Corporation is a legal form of business that is separate from its owner. In other words, a corporation is a business or organization formed by a group of people, and its right and liabilities separate from those of the individuals involved. It may...