The Park Company Owns 80% of the Outstanding Common Stock

question 45

Essay

The Park Company owns 80% of the outstanding common stock of the Sea Company. Park is about to lease a machine with a 5-year life to the Sea Company. The lease would begin January 1, 20X3.
Required:
Explain the adjustments that will be required in the consolidation process if each of the following occurs.
a.The lease is an operating lease.
b.The lease is a direct financing lease with a bargain purchase option.
c.The lease is a sales-type lease with a bargain purchase option.

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Definitions:

Continental Congress

First meeting of representatives of the colonies, held in Philadelphia in 1774 to formulate actions against British policies; in the Second Continental Congress (1775–1789), the colonial representatives conducted the war and adopted the Declaration of Independence and the Articles of Confederation.

Language of Freedom

Often refers to the rhetoric and terminology used to discuss and promote concepts of liberty, rights, and democracy, particularly in political and social contexts.

Abigail Adams

An early American advocate for women's rights and the wife of John Adams, the second President of the United States.

State Constitutions

Documents that define the structure, functions, and principles of government at the state level in the United States, each varying to reflect local values and needs.