In Subsequent Measurement of a Direct Financing Lease, the Lessor

question 147

Multiple Choice

In subsequent measurement of a direct financing lease, the lessor computes interest revenue using the ________ method. The lessor allocates lease payments first to cover the ________ and then to ________ the NIL-DF. The interest revenue, which is reported on the income statement, is the amount that produces a constant periodic discount rate on the remaining balance of the NIL-DF.

• A) straight-line interest; interest; reduce
• B) straight-line interest; interest; increase
• C) effective interest rate; interest; reduce
• D) effective interest rate; interest; increase

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Definitions:

Strong Arm Collection Agency

An aggressive debt collection agency that uses intense or forceful tactics to recover debts owed by individuals or businesses.

Collection Prohibited Methods

Specific practices that are not allowed when attempting to collect debts due to their violation of legal standards or ethics.

Immediate Family

Close relatives, typically including one's parents, siblings, spouse, and children.

Demand for Payment

A formal request for the payment of money owed, often preceding legal action for recovery.