One criterion for an arrangement to constitute a lease is that we have an identified asset. Which of the following is required in order for a contract to contain an identified asset?
Added by Eric H.
Step 1
Let's think step by step. Show more…
Show all steps
Your feedback will help us improve your experience
Adi S and 53 other Principles of Accounting educators are ready to help you.
Ask a new question
Labs
Want to see this concept in action?
Explore this concept interactively to see how it behaves as you change inputs.
Recommended Videos
A company must account for a leased asset as a capital lease by recording an asset and liability on the company's balance sheet if it had assumed the risk and reward of ownership. Which one the following is "not" one of the defining conditions FASB has established to determine that the risk and reward of ownership has been transferred from the lessor to the lessee? the present value of the lease payments is greater than 90% of the fair market value of the leased asset the lease transfers title at the end of the lease the lease contains a bargain purchase option the lease term is greater than 50% of the asset's useful life
Adi S.
1. Y executed a document whereby she agreed to transfer to Z the whole right, title and interest in a particular business. This whole was a 1/5 of the entire net value of the business. The parties agreed that the price should be 1/5 of the total net value. The ascertainment of such net value was left unreservedly to the judgment of appraisers. Is the price certain? Why or why not? 2. AB bought a lotto ticket in the hope of winning a prize. Identify what is the object of the contract and if the sale is valid? Explain why. 3. C sold to B certain goods for a sufficient amount of consideration. At the time of sale, C is not the owner of the goods. Is there a valid sale to B? Why or why not? 4. The property sold by S to B is a portion of a parcel of land. However during the perfection of the contract, the parties have not agreed upon a definite price at the time of sale and it will be fixed by S. Is there a valid contract of sale between them? Why or why not?
Jennifer S.
Assume the initial present value of the payments on a lease are equal to the cost of the leased asset. This capital lease is recorded as an asset on the balance sheet of the lessee in an amount equal to the: A) dollar amount of each lease payment multiplied by the total number of lease payments in the original agreement. B) dollar amount of each lease payment multiplied by the number of lease payments remaining. C) dollar amount of each lease payment multiplied by the number of lease payments per year. D) present value of the remaining lease payments. E) lesser of the present value of the remaining lease payments or the present value of the lease payments for a one-year period..
Recommended Textbooks
Horngren’s Cost Accounting
Cost Accounting A Managerial Emphasis
Principles of Accounting Volume 1: Financial Accounting
Transcript
18,000,000+
Students on Numerade
Trusted by students at 8,000+ universities
Watch the video solution with this free unlock.
EMAIL
PASSWORD