Chapter 21 Solutions

CHAPTER 21

Accounting for Leases

ASSIGNMENT CLASSIFICATION TABLE (BY TOPIC)

Topics

Questions
Brief Exercises

Exercises

Problems Concepts for Analysis
*1. Rationale for leasing.
1, 2, 4

1, 2
*2. Lessees; classification of leases; accounting by lessees.
3, 5, 7,
8, 14
1, 2, 3,
4, 5
1, 2, 3,
5, 7, 8, 11, 12, 13, 14
1, 2, 3, 4,
6, 7, 8, 9, 11, 12, 14,
15, 16
1, 2, 3,
4, 5, 6
*3. Disclosure of leases.
19

2, 4, 5,
7, 8
2, 3, 5
*4. Lessors; classification of leases; accounting by lessors.
5, 6, 9, 10, 11, 12, 13
6, 7, 8, 11
4, 5, 6, 7, 9, 10, 12, 13, 14
1, 2, 3, 5, 10, 16
2, 4
*5. Residual values; bargain-purchase options; initial direct costs.
15, 16,
17, 18
9, 10
4, 8,
9, 10
6, 7, 10,
11, 13,
14, 15
5, 6
*6. Sale-leaseback.
20
12
15, 16

7, 8

*This material is dealt with in an Appendix to the chapter.

ASSIGNMENT CLASSIFICATION TABLE (BY LEARNING OBJECTIVE)

Learning Objectives Brief Exercises

Exercises

Problems
1. Explain the nature, economic substance, and advantages of lease transactions.

2. Describe the accounting criteria and procedures for capitalizing leases by the lessee.
1, 2, 3, 4
1, 2, 3,
5, 11
1, 3, 4, 6, 7, 8, 9, 11, 12, 14, 15, 16
3. Contrast the operating and capitalization methods of recording leases.
5
5, 12,
13, 14
2, 15
4. Identify the classifications of leases for the lessor.
6, 7, 8
12, 13, 14
2, 10, 13, 16
5. Describe the lessor’s accounting for direct-financing leases.
6, 7
4, 10
5
6. Identify special features of lease arrangements that cause unique accounting problems.
9, 10
8, 9
4, 9, 11, 12
7. Describe the effect of residual values, guaranteed and unguaranteed, on lease accounting.
9, 10
3
6, 10, 11, 13, 14, 15, 16
8. Describe the lessor’s accounting for sales-type leases.
11
6, 7
1, 3, 10, 13
9. List the disclosure requirements for leases.

3, 4, 5, 7, 8
*10. Understand and apply