Technoid Inc

question 99

Multiple Choice

Technoid Inc. sells computer systems. Technoid leases computers to Lone Star Company on January 1, 2018. The manufacturing cost of the computers was $12 million.

This noncancelable lease had the following terms:

• Lease payments: $2,466,754 semiannually; first payment at January 1, 2018;
remaining payments at June 30 and December 31 each year through June 30, 2022.
• Lease term: five years (10 semiannual payments) .
• No residual value; no purchase option.
• Economic life of equipment: five years.
• Implicit interest rate and lessee's incremental borrowing rate: 5% semiannually.
• Fair value of the computers at January 1, 2018: $20 million.

-Technoid would account for this as:

• A) A finance lease.
• B) A sales-type lease without selling profit.
• C) A sales-type lease with selling profit.
• D) An operating lease.

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Definitions:

Change Competency

The capability of individuals or organizations to effectively manage and adapt to changes within their environment or within themselves.

Awesome Products

Exceptionally good or impressive products that exceed expectations in terms of utility, design, and quality.

Contingency Models

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Leadership Models

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