Presented Below Are Three Different Aircraft Lease Transactions That Occurred

question 115

Essay

Presented below are three different aircraft lease transactions that occurred for Western Airways in 2014. All the leases start on January 1, 2014. In no case does Western receive title to the aircraft during or at the end of the lease period; nor is there a bargain purchase option.
Instructions
(a) Which of the above leases are operating leases and which are finance leases? Explain your answer.
(b) How should the lease transaction with Utah Insurance be recorded in 2014?
(c) How should the lease transaction with Laine Leasing be recorded in 2014?

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Definitions:

Tubular Reabsorption

The process by which solutes and water are removed from the tubular fluid in the kidneys and re-enter the bloodstream, aiding in waste removal and water balance.

Solutes

Substances dissolved in a solvent to form a solution, typically found in a lesser amount compared to the solvent.

Urine Formation

The physiological process involving filtration, reabsorption, and secretion by the kidneys to remove waste products from the blood and produce urine.

Vasodilation

Widening of a blood vessel when smooth muscle that rings it relaxes.