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3 Cards in this Set
- Front
- Back
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Eegad Company leases equiptment from Oregon Company. The equiptment cost oregon $50,000, which is also its market value. The equipment has an economic life of 10 years. Eegad will make eight annual payments of $8,000. How would the lessee and lessor classify this lease?
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Capital & Direct-Financing
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A company is leasing equipment under a lease that is classified as capital. Which of the following accounts would appear on the lessee's balance sheet as a result of the lease?
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Lease Liability & Leased Equipment. Both A and B
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Element company is leasing machinery from oliver company for a five year time period. The lease agreement contains a bargain purchase option. The machinery has an economic life of eight years. Which of the following statements is true regarding depreciation of this machine?
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Element will record depreciation using a five year life.
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