Presented Below Are Three Different Aircraft Lease Transactions That Occurred

question 33

Essay

Presented below are three different aircraft lease transactions that occurred for Midwest Airways in 2010. All the leases start on January 1, 2010. In no case does Midwest 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 capital leases? Explain your answer.
(b) How should the lease transaction with Winsor Insurance be recorded in 2010?
(c) How should the lease transaction with Gray Leasing be recorded in 2010?

---

Definitions:

Business Event

An occurrence or activity organized by a company or organization, usually with a specific purpose related to its operations, networking, or marketing.

ERP

Enterprise Resource Planning, a type of software used by organizations to manage and integrate important parts of their businesses.

Functional Areas

distinct departments or groups within an organization, each focusing on a specific aspect of the organization's operations, such as marketing, finance, or HR.

Information Flow

Information Flow is the movement or exchange of data within a network or system, illustrating how information is shared or transmitted from one part of a system to another.