Explore BrainMass

Explore BrainMass

    Recording a Capital Lease with bargain purchase option

    Not what you're looking for? Search our solutions OR ask your own Custom question.

    This content was COPIED from BrainMass.com - View the original, and get the already-completed solution here!

    We have been paying a rental fee for a forklift but are at the end of the contract and will be buying it out for $1.00.

    What is the accounting transaction for a Capital Lease with the $1 Buyout?

    © BrainMass Inc. brainmass.com March 4, 2021, 11:19 pm ad1c9bdddf

    Solution Preview

    If you have had a forklift under a capital lease, you have recorded it as an asset and have been depreciating it over the lease term. Upon buying the asset at the end of the lease, you record the $1 plus the salvage value (the book value at the end of the ...

    Solution Summary

    The tutorial explains the approach and gives you an example (with dollar amounts) of an asset that was purchased and depreciated and then purchased at the end of the lease for $1.