Case 13-1 Recording an Operating lease Noel Company leases 25 cell phones for three years....
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Accounting
Case 13-1 Recording an Operating lease
Noel Company leases 25 cell phones for three years. The rent for the phones is $1,700 a month for 36 months ($61,200 in total). The fair value of the leased phones is $65,000. Noels has an 5.5% incremental borrowing rate and the PV of the lease payments is $56,557.
Required:
- How would Noel have recorded this transaction under SFAS No. 13?
- How should Noel record this transaction under FASB ASC 842?
Please show work! Thank you!!
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