When the Lessee Guarantees Only a Portion of the Estimated

question 38

Multiple Choice

When the lessee guarantees only a portion of the estimated residual value, the:

• A)lessor's and lessee's accounting entries will be symmetrical.
• B)guaranteed portion is disregarded when computing the annual rentals.
• C)lessee only takes into account the guaranteed portion when computing depreciation expense.
• D)lessee will never have to compensate the lessor for the excess of the guaranteed amount over the actual residual value.

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