In Computing the Present Value of the Minimum Lease Payments

question 22

Multiple Choice

In computing the present value of the minimum lease payments under ASC 842, the lessee should

• A) Use its incremental borrowing rate in all cases
• B) Use either its incremental borrowing rate or the implicit rate of the lessor, whichever is higher, assuming that the implicit rate is known to the lessee
• C) Use either its incremental borrowing rate or the implicit rate of the lessor, whichever is lower, assuming that the implicit rate is known to the lessee
• D) Use the implicit rate in all cases.

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Definitions:

Dietary Restrictions

Limitations on the consumption of certain foods or ingredients based on medical, ethical, or personal reasons.

Diabetes

A group of diseases characterized by high levels of blood glucose resulting from defects in insulin production, insulin action, or both.

Cardiovascular Disease

A general term for conditions affecting the heart and blood vessels, such as coronary artery disease, heart attack, and stroke.

Gum Disease

A set of inflammatory conditions affecting the tissues surrounding the teeth, which can lead to loss of teeth if untreated.