If premiums are found in a lease agreement, the equivalent of the rent payment (effective rent) will be Can be either higher or lower than the contract rent Lower than the contract rent Higher than the contract rent Same to the contract rent
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- An amount paid by the lessee to the lessor in addition to the periodic rental which is treated by the lessor as an unearned rent income to be amortized over the lease term. a. Contingent rent b. Lease bonus c. Initial direct cost d. Security depositDescribe and demonstrate how the lessor accounts for a sales-type lease with a selling profit.Lease bonus is recognized by the lessor as a liability amortized over the lease term. * True or False?
- For the lessor to account for a lease as a sales-type lease, the lease must meet:The rent expense of the lessee maybe composed of the following:I. Straight-line amortization of total rental payments over the lease term plus any free rent.II. Straight-line amortization of lease bonus paid by the lessee at inception of the lease.III. Any contingent rent accrued to the lessor as part of lease agreement. Group of answer choices I and III only II and III only I and II only I, II, and IIIThe rent expense of the lessee maybe composed of the following:I. Straight-line amortization of total rental payments over the lease term plus any free rent.II. Straight-line amortization of lease bonus paid by the lessee at inception of the lease.III. Any contingent rent accrued to the lessor as part of lease agreement. I and III only I and II only II and III only I, II, and III
- Explain when and how a lessee accounts for a lease by the short-cut method.Is there a need to amortize deferred rent income/unearned rent income in an operating lease?What is the reason for excluding variable lease payments from the measurement of the lessee’s lease liability and the lessor’s receivable?
- The rent expense of the lessee maybe composed of the following:I. Straight-line amortization of total rental payments over the lease term plus any free rent.II. Straight-line amortization of lease bonus paid by the lessee at inception of the lease.III. Any contingent rent accrued to the lessor as part of lease agreement. A. I and III only B. I, II, and III C. II and III only D. I and II onlyA lease agreement whereby the lessee recognized rent expense which is always equals to the rent income recognized by the lessor at a given period of time. A. Operating lease B. Finance lease C Terminating lease D. Sale type leaseRent received in advance by the lessor in an operating lease should be recognized as revenue