Response to the following questions:
1. What does GAAP provide in reference to the measuring and reporting of leases?
2. List seven advantages to the lessee of leasing, as compared with purchasing, an asset.
3. Assume that a lessee leases equipment and insists on terms that qualify it as an operating lease, barely escaping the qualification as a capital lease. Discuss the impact that such an operating lease has on financial statements and related financial information as compared to the effect that a capital lease would have.