Theory and Analysis Coursework Example | Topics and Well Written Essays - 500 words

Theory and Analysis - Coursework ExampleThe amount to be save would be either the present value or the fair market value of the asset. In this deterrent example the amount to be recorded is the present value which is calculated by discounting annuity due payments by discount rate of 8%. Amount totaled to be $86,243 in comparison to $96,000 i.e. the fair market value. b) The costs associated with the lease are taxes, insurance, maintenance and depreciation. These costs are obligatory to pay as it is considered minor expense to ownership. These costs would be determined during the operations conducted by or on the property. Depreciation can be charged through straight line method. c) Lani would record lease transaction on December 31st,2006 on the balance sheet as Principal-Payment-(Principal* matter to percentage) This will give you the amount to be balanced as Lease in the liability section as well as provide you with the proportion of interest payment from the Annual annuity paid . CASE 13-5 Lease in order should meet the following criteria for Doherty troupe to classify it as a capital lease Firstly, the lease should transfer ownership of the good to the lessee at the end of the lease term. Also, it should be noncancelable plus renewal options and periods should be attached.