• He Park Company owns 80% of the outstanding common stock of the Sea Company. Park is about to lease a machine with a 5-year life to the Sea Company. The lease would begin January 1, 20X3.
• Required:
• Explain the adjustments that will be required in the consolidation process if each of the following occurs.
• a. The lease is an operating lease.
• b. The lease is a direct financing lease with a bargain purchase option.
• c. The lease is a sales-type lease with a bargain purchase option. When completed submit your assignment to the appropriate area.

Answer rating: 100% (QA)

When the lease is an operating lease Typically the procedure for consolidation for any intercompany lease is entirely dependent on the initial lease r... View the full answer