If a Lessee Does Not Exercise a Bargain Purchase Option

question 224

Multiple Choice

If a lessee does not exercise a bargain purchase option prior to its lapse date, the:

• A)bargain purchase option cannot lapse because this option was included in computing the annual rental amounts.
• B)lessee continues to record depreciation on the lease asset because it was assumed from the beginning that the lessee would retain ownership of the asset.
• C)lessee recognizes a gain due to the lapse.
• D)lessee recognizes a loss due to the lapse.

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Definitions:

Agoraphobia

The fear of places and situations that might cause panic, helplessness, or embarrassment.

Social Anxiety Disorder

A chronic mental health condition characterized by an intense fear of social situations due to perceived negative evaluation by others.

Specific Phobia

An intense, irrational fear of a specific object, activity, or situation that leads to significant distress or impairment in social, occupational, or other important areas of functioning.

Anxiety

A feeling of worry, nervousness, or unease, typically about an imminent event or something with an uncertain outcome.