Business Administration 2257 Study Guide - Midterm Guide: Finance Lease, Accounts Payable, Stock Split
6 Apr 2016
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Operaing leases: e. g. , a 1-year lease of a cart vender slot at a mall. Cr cash / accounts payable / prepaid lease. Finance leases: if any one of the following condiions are met it is normally a inance lease. It"s reasonably certain the asset will be transferred or purchased by the lessee at the end of the lease. The lease duraion extends for the majority of the asset"s economic life so that the lessee will receive most of the economic beneit. At the incepion of the lease, the present value of the lease payments equal substanially all of the value of the asset. The leased asset is so specialized that only the lessee can use it without modiicaion. e. g. , january 1: 5,000 outstanding shares january 15: 3:1 stock split o. Increase number of outstanding shares to 15,000 shares (10,000 addiional shares) Dr common shares cr contributed capital common shares (or.
