Solved

Match Each Term to Its Definition by Placing the Appropriate

Question 21

Matching

Match each term to its definition by placing the appropriate letter in the space provided

Premises:
Incurred by the lessor to originate a lease that result directly from and are essential to acquiring the lease and would not have been incurred had the lease transaction not occurred.
Portion of estimated residual value not guaranteed by the lessee.
Required to be paid by the lessee to the lessor over the life of the lease.
Rate that would have been incurred if the property had been purchased by debt.
Rate that equates the fair value of the leased property and the present value of the lease payments plus the unguaranteed residual value.
Provision that allows the lessee to purchase the leased property at a price so favorable it is a reasonable certainty that the sale will occur.
The difference between the fair value of the property at the beginning of the lease and its cost or carrying value.
Commitments by the lessor to guarantee performance of the leased property in a manner more extensive than the typical product warranty.
Portion of the residual value of the leased property that is guaranteed by the lessee.
Ownership-type costs, such as insurance, maintenance, and property taxes.
Responses:
bargain purchase option
executory costs
guaranteed residual value
initial direct costs
interest rate implicit in the lease
lessee's incremental borrowing rate
manufacturer's/dealer's profit or loss
minimum lease payments
unguaranteed residual value
unreimbursable cost

Correct Answer:

Incurred by the lessor to originate a lease that result directly from and are essential to acquiring the lease and would not have been incurred had the lease transaction not occurred.
Portion of estimated residual value not guaranteed by the lessee.
Required to be paid by the lessee to the lessor over the life of the lease.
Rate that would have been incurred if the property had been purchased by debt.
Rate that equates the fair value of the leased property and the present value of the lease payments plus the unguaranteed residual value.
Provision that allows the lessee to purchase the leased property at a price so favorable it is a reasonable certainty that the sale will occur.
The difference between the fair value of the property at the beginning of the lease and its cost or carrying value.
Commitments by the lessor to guarantee performance of the leased property in a manner more extensive than the typical product warranty.
Portion of the residual value of the leased property that is guaranteed by the lessee.
Ownership-type costs, such as insurance, maintenance, and property taxes.
Related Questions

Q16: On January 3, 2010, the Walton

Q17: On January 1, 2010, Leslie Company

Q18: When a lessor receives cash on a

Q19: On January 1, 2010, Remy Corp., a

Q20: From the lessor's standpoint, all of the

Q22: Which of the following items would not

Q23: Exhibit 21-5 The Chicago, Inc.entered into

Q24: The lessee's footnote disclosures should include the

Q25: Depreciation expense will be recorded in the

Q26: In a sales-leaseback transaction<br>A)the sale and leaseback