Ed Signs a Ten-Year Lease with a Survival Clause

question 1

Multiple Choice

Ed signs a ten-year lease with a survival clause. If Ed is evicted after two years, he will have to pay:

• A) rent for the remaining 8 years.
• B) damages equal to the difference between the rent specified in the lease and the rent the landlord is able to obtain from reletting the premises.
• C) until eviction.
• D) until he assigns the lease.

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Definitions:

Direct Labor

The wages paid to workers directly involved in the production of goods or services.

Overhead

The ongoing operational costs not directly attributable to the creation of a product or service.

General Journal

A comprehensive journal used in bookkeeping to record all types of accounting transactions before their transfer to specific accounts in the ledger.

Predetermined Rate

A rate established before the start of a period for the purpose of applying overhead costs to products or services, based on estimated costs.