Fast Car

Interamerican University of Puerto Rico Metropolitan Campus Business Administration Graduate tutor FastCar, Inc. effort 5 I. Case Summary FastCar Parts (FastCar), a manufacturer of automotive engines, is a private entity that strikes a grammatical construction from a related party, RE Properties, LLC ( legitimate demesne). hearty Estate is wholly possess by Charles Bigbux, who also is the volume share trammeler, 60% ownership of FastCar. Real Estate was capitalized solely with $30,000 of fair-mindedness from Mr. Bigbux and $970,000 in 10-year fixed-rate debt under a bring with Pacific Bank. The loan scathe establishes that Pacific Banks collateral entrust be the pluss of Real Estate and the personal assets of Mr. Bigbux. The only asset owned by Real Estate is the construct rent to FastCar. The charter meets the classification for an operating(a) train in conformance wi th FASB averment no. 13, Accounting for Leases, and contains no explicit guarantees of the rest value of the building or any fixed-price purchase options. At inception, the terms of the lease were consistent with fair market rentals. The lease is the only contractual relationship between FastCar and Real Estate.

II. financial Reporting step forward or Issues presented in the case Does FastCar, the lessee (arrendatario) under the operating lease, hold a variable interest in Real Estate, the lessor (arrendador) entity? III. Alternatives on hand(predicate) to report the issue discussed above indicating the authoritativ e basis The recital of Financial Account! ing Standards No.13 defines the following: Related parties in leasing heavy proceeding - A parent familiarity and its subsidiaries, an owner company and its stick ventures (corporate or otherwise) and partnerships, and an investor (including a natural person) and its investees (the business entity in which an coronation has been made[1]), provided that the parent company, owner company, or...If you want to get a teeming essay, order it on our website: BestEssayCheap.com

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