contestada

Able Co. leased equipment to Baker under a noncancelable lease with a transfer of title. Will Able record depreciation expense on the leased asset and interest revenue related to the lease?
Depreciation expense Interest revenue:__________.
a) Yes Yes
b) Yes No
c) No No
d) No Yes

Respuesta :

hyderali230

Answer:

d) No Yes

Explanation:

In a noncancelable lease

Able ( lessor ) should not depreciate the leased asset because the tangible leased asset now, converted into the financial asset.

The interest income on this financial asset is recognized.

Each Lease payment is compromised of the interest income and principal repayment by the Baker (lessee)

Hence, Able should

Should not record the Depreciation.

Should recognized the interest income.

Otras preguntas