FAR 4 Module 7 Lessee

Question 1

How would you create a table to calculate the carrying value of lease liabilities?

What would be the headers and how would you determine the interest liability?

Answer 1

Interest Liability

Carrying amount X Implicit Rate

Question 2

What is OWNES REPORT N GO

Answer 2

Question 3

In which month should the company begin recognizing lease expense for the office space leased on January 1, with alterations starting on March 1, staff moving in on May 1, and lease payments beginning on July 1?

Answer 3

JANUARY

The lessee should begin the recognition of leased expense for the new office in January

Question 4

At the inception of a finance lease, the residual value expected to be owed at the end of the lease term should be:

Answer 4

Question 5

A 20-year operating lease includes a 10% increase in payments every five years. In the sixth year compared to the fifth year, will lease expense and interest expense increase?

Lease?
Interest?

Answer 5

Question 6

Whats the rule of leasehold improvements for amortization the useful life or term?

Answer 6

Amortization of leasehold improvements should be over the life of the improvements or the remaining life of the lease, whichever is shorter.