Questions from Intermediate Accounting

Q: The lease term is the noncancelable period for which a lessee has

The lease term is the noncancelable period for which a lessee has the right to use an underlying asset, modified by any renewal or termination options that are “reasonably certain” to be exercised, or...

Q: Access the FASB’s Codification Research System at the FASB website (www

Access the FASB’s Codification Research System at the FASB website (www.fasb.org). Determine the specific citation for accounting for each of the following items: 1. Definition of initial direct costs...

Q: To raise operating funds, Signal Aviation sold an airplane on January

To raise operating funds, Signal Aviation sold an airplane on January 1, 2018, to a finance company for $770,000. Signal immediately leased the plane back for a 13-year period, at which time ownership...

Q: To raise operating funds, National Distribution Center sold its office building

To raise operating funds, National Distribution Center sold its office building to an insurance company on January 1, 2018, for $800,000 and immediately leased the building back. The operating lease i...

Q: Each of the four independent situations below describes a lease requiring annual

Each of the four independent situations below describes a lease requiring annual lease payments of $10,000. For each situation, determine the appropriate lease classification by the lessee and indicat...

Q: Each of the three independent situations below describes a finance lease in

Each of the three independent situations below describes a finance lease in which annual lease payments are payable at the end of each year. The lessee is aware of the lessor’s impli...

Q: Listed below are several terms and phrases associated with long-term

Listed below are several terms and phrases associated with long-term debt. Pair each item from List A with the item from List B (by letter) that is most appropriately associated with it.

Q: American Food Services, Inc. leased a packaging machine from Barton

American Food Services, Inc. leased a packaging machine from Barton and Barton Corporation. Barton and Barton completed construction of the machine on January 1, 2018. The lease agreement for the $4 m...

Q: At times, companies try to induce voluntary conversion by offering an

At times, companies try to induce voluntary conversion by offering an added incentive—maybe cash, stock warrants, or a more favorable conversion ratio. How is such an inducement accounted for? How is...

Q: Rhone-Metro Industries manufactures equipment that is sold or leased.

Rhone-Metro Industries manufactures equipment that is sold or leased. On December 31, 2018, Rhone-Metro leased equipment to Western Soya Co. for a noncancelable stated lease term of four years ending...