A Six-Year Operating Lease Requires Annual Rent Payments of $15

question 32

Multiple Choice

A six-year operating lease requires annual rent payments of $15, 000 for years 1, 2, and 3, and annual rent payments of $10, 000 for years 4, 5, and 6.The agreement also requires the lessor to pay a $1, 800 annual insurance premium for the leased property.Which of the following amounts should be recognized as the rental revenue in year 1 by the lessor?

• A)$10, 000
• B)$13, 500
• C)$15, 000
• D)$16, 800

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Definitions:

Biogeochemical Cycle

The circulation of elements and substances through living organisms, the Earth, its atmosphere, and the oceans, contributing to ecosystem functioning and sustainability.

Phosphorus

A chemical element essential for life, involved in many cellular processes, including energy transfer and the formation of bones and teeth.

Biogeochemical Pathway

Cycles that involve the movement and chemical transformation of substances through biological, geological, and chemical processes on Earth.

Elements

Substances that cannot be broken down into substances with different properties; composed of only one type of atom.