Instructions:
Complete the following concept questions: Chapter 21 – Questions 7, 9
It is expected that you will provide your best, supported thinking when answering concept questions.
Use of outside research sources must be documented.
7. Off-Balance Sheet Financing What is meant by the term “off-balance sheet financing”? When do leases provide such financing and what are the accounting and economic consequences of such activity?
9. Leasing Cost Explain why the after tax borrowing rate is the appropriate discount rate to use in lease evaluation.
