Leases

Question 1

4 criteria and if any one are met then it is a capital lease

Answer 1

Ownership transfers at end of the lease term
Bargain purchase option
Lease term >= 75% of leased asset life
PV of lease payments >= 90% of cash price of leased asset

Question 2

Lessor should recognize a bonus payment when

Answer 2

Total payments should be recognized over the life of the lease