Lease contracts entered into by New Inc., a lessee, specify that the lessor is to...
50.1K
Verified Solution
Link Copied!
Question
Accounting
Lease contracts entered into by New Inc., a lessee, specify that the lessor is to pay hazard insurance premiums. These costs are embedded in the periodic payments. New Inc.'s policy is to independently expense these costs rather than capitalize them as part of the right-of-use asset. Which of the following is an accurate statement regarding the company's policy? The policy is inappropriate because those payments do not transfer to the lessee a separate good or service. a. b. The policy is appropriate because the lessee is given the option to elect to include nonlease components. This approach is inappropriate because lessor had to make these payments. C. The policy is appropriate because those payments transfer to the lessee a separate good or service. d. The policy is appropriate because the charge qualifies as a "nonlease component" of the payment and is separated from the lease e. payments
Answer & Explanation
Solved by verified expert
Get Answers to Unlimited Questions
Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!
Membership Benefits:
Unlimited Question Access with detailed Answers
Zin AI - 3 Million Words
10 Dall-E 3 Images
20 Plot Generations
Conversation with Dialogue Memory
No Ads, Ever!
Access to Our Best AI Platform: Zin AI - Your personal assistant for all your inquiries!
