On January 1, 2022, Perriman Company transferred equipment for cash and leased it back. As seller-lessee, Perriman

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On January 1, 2022, Perriman Company transferred equipment for cash and leased it back. As seller-lessee, Perriman retained the right to substantially all of the remaining use of the equipment. The term of the lease is 8 years.

Instructions

a. What is the major issue related to sale-leaseback accounting?

b. 1. How should Perriman account for the sale portion of the sale-leaseback transaction at January 1, 2022?

2. How should Perriman account for the leaseback portion of the saleleaseback transaction at January 1, 2022?

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Intermediate Accounting IFRS

ISBN: 9781119607519

4th Edition

Authors: Donald E. Kieso, Jerry J. Weygandt, Terry D. Warfield

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Question Posted: Aug 04, 2021 01:50 AM

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On January 1, 2022, Perriman Company transferred equipment for cash and leased it back. As seller-lessee, Perriman

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a The major issue related to saleleaseback accounting is whether the transaction should be ac...View the full answer

Intermediate Accounting IFRS

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