Questions from Intermediate Accounting

Q: Bradley-Link’s December 31, 2018, balance sheet included the

Bradley-Link’s December 31, 2018, balance sheet included the following items: Long-Term Liabilities _________________________________ ($ in millions) 9.6% convertible bonds, callable at 101 beginning...

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

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

Q: In a financing lease, “front loading” of lease expense

In a financing lease, “front loading” of lease expense and lease revenue occurs. What does this mean, and how is it avoided in an operating lease?

Q: At January 1, 2018, Café Med leased restaurant equipment from

At January 1, 2018, Café Med leased restaurant equipment from Crescent Corporation under a nine-year lease agreement. The lease agreement specifies annual payments of $25,000 beginning January 1, 2018...

Q: Both convertible bonds and bonds issued with detachable warrants have features of

Both convertible bonds and bonds issued with detachable warrants have features of both debt and equity. How does the accounting treatment differ for the two hybrid securities? Why is the accounting tr...

Q: The 2018 annual report of MLS Corporation included the following disclosure note

The 2018 annual report of MLS Corporation included the following disclosure note: Note 10: Borrowings (in part) Convertible Debt On June 15, 2018, we issued $125 million of zero coupon convertible uns...

Q: Terms of a lease agreement and related facts were: a

Terms of a lease agreement and related facts were: a. Incremental costs of commissions for brokering the lease and consummating the completed lease transaction incurred by the lessor were $4,242. b. T...

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 beginning of each year. The lessee is aware of the lessor’s...

Q: Each of the four independent situations below describes a sales-type

Each of the four independent situations below describes a sales-type lease in which annual lease payments of $100,000 are payable at the beginning of each year. Each is a finance lease for the lessee....

Q: Bidwell Leasing purchased a single-engine plane for $400,

Bidwell Leasing purchased a single-engine plane for $400,000 and leased it to Red Baron Flying Club for its fair value of $645,526 on January 1, 2018. Terms of the lease agreement and related facts we...