Capital Leases Would Show Up on the Balance Sheet of the Firm

question 23

Multiple Choice

Capital leases would show up on the balance sheet of the firm in which manner for a six year machinery lease worth $700,000:

• A) capital leases do not have to be put on the balance sheet only financial leases do.
• B) Asset-Machinery $700,000; Liabilities-Long term debt $700,000 because of debt displacement.
• C) Asset-Assets under capital lease $700,000; Liabilities-Obligations under capital lease $700,000.
• D) Assets-Assets under capital lease $700,000; Liabilities-Long term debt $700,000 because of debt displacement.

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Definitions:

Lack of Response

An absence of reaction or feedback following an action, query, or request, potentially indicating disinterest or disregard.

Social Pressure

The influence exerted by society or groups on individuals to make them behave in certain ways.

Minority Domination

A situation where a smaller or less powerful group controls or heavily influences decision-making or outcomes within a larger group or organization.

Time Delays

The period between the initiation of an action and its effect or outcome, often causing inconvenience or the need for adjustments in planning.