When should a lessor books a sales-type lease or a direct financing lease? After the mock exam and checks Schweser, I still don’t get it… Is there anything to do with the lease period (75% etc.)?
A Sales Type lease - Cap. Lease where the lessor is a dealer **Set up as a sale and profit is recognized **Also recognized interest income Direct Fin. Lease - Cap. Lease where the lessor is not a dealer **Only interest income is rec. on the IS
The lessor question on the mock exam didn’t tell you if the leasor is a dealer or not…
I just read the answer on answer sheet and it kinda contradicted schweser Cause schweser says a sales type lease an asset is recorded as the present value of all future lease payments? But in the answer the company recorded it at less than that?