The Following Are Characteristics of a Lease Requirement:
Determine the Appropriate Classification for This Lease for the l

question 36

Essay

The following are characteristics of a lease:
$$\begin{array} { | l | l | } \hline \text { Price of leased asset from manufacturer } & 312,100 \\\hline \text { Lease payments } & 100,000 \\\hline \text { Lease term } & 4 \text { years } \\\hline \text { Lease frequency } & \text { Annual } \\\hline \text { Payment timing } & \text { End of year } \\\hline \text { Guaranteed residual value } & 35,000 \\\hline \text { Interest rate implicit in the lease agreement } & 14 \% \\\hline\end{array}$$ Requirement:
Determine the appropriate classification for this lease for the lessor (who is not the manufacturer)and record the journal entries for the lessor for the first year of the lease.

---

Definitions:

Due Process of Law

The legal requirement that the state must respect all legal rights owed to a person, ensuring fairness in legal proceedings.

Writ of Habeas Corpus

A legal order requiring a person under arrest to be brought before a judge or into court, ensuring protection against illegal detention.

Legal Warrant

A legal document issued by a court or magisterial authority permitting law enforcement to perform an action that would otherwise be prohibited, such as searching a premise.

Civil Law

A legal system that deals with disputes between private parties, encompassing laws such as contracts, property, and family law.