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Required a What is the theoretical basis for the accounting standard that requires certain longterm leases to be capitalized by the lessee Do not discuss the specific criteria for classifying a specific lease as a capital lease b How should Lani account for this lease at its inception and determine the amount to be recorded c What expenses related to this lease will Lani incur during the first year of the lease and how will they be determined d How should Lani report the lease transaction on itsShow more…
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This principle states that the economic substance of a transaction should be recorded in the financial statements rather than just its legal form. In the case of capital leases, the lessee is essentially financing the acquisition of an asset through the lease Show more…
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