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Effect of different type of lease transaction in balance sheet.

On January 1, 2009, the Needy Company signed a lease that requires payments of $90,000 per year for 8 years with each payment made at the end of each year. The interest rate is 10%. The property cost the lessor $400,000. Make any necessary simplifying assumptions as we did in class.

a. If the lease is an operating lease, show all the effects of the lease on the 2009 financial statements of the lessee.

b. If the lease is a capital lease, show all the effects of the lease on the 2009 financial statement of the lessee.

c. If the lease in an operating lease, show all the effects of the lease on the 2009 financial statements of the lessor - a manufacturer.

d. If the lease is a capital lease show all the effects of the lease on the 2009 financial statement of the lessor - a manufacturer.

e. If the lease is a capital lease, show all the effects of the lease on the 2009 financial statements of the lessor - a financial institution.

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Financial Accounting, Accounting

Category:- Financial Accounting
Reference No.:- M9164517

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