ACC-202 Lecture Notes - Lecture 41: Net Income, Operating Lease, Interest Expense
21 Apr 2016
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Bond = your company is taking on a liability and taking on cash. Payback the interest and at the end of the term pay back the principle. Lease = you"re getting something that will last more than a year. Have to make a down payment and recurring payments. Bpo = we have the right, but not the obligation to pay 50,000 to keep the car. Usually at the end of the lease you can buy it for a set amount bargain purchase // lower amount to account for some of the payments you have already paid. Main difference is that a lease you have to make a down payment. A bond is always a liability// a lease is assets and liabilities. If you buy it (without cash), your asset and you liabilities go up. If you lease it, your assets and liabilities remain the same // makes performance as a company look better.
