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Occasionally, a Lease Agreement Includes a Guarantee by the Lessee

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Essay

Occasionally, a lease agreement includes a guarantee by the lessee that the lessor will recover a specified residual value when custody of the asset reverts back to the lessor at the end of the lease term. Under what circumstance can the guaranteed residual value influence the amounts recorded by the lessee and lessor? In that circumstance, how are the amounts affected?

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Definitions:

Religious Thinking

A cognitive process that involves belief in supernatural forces or beings.

Piaget

A developmental psychologist known for his theory of cognitive development that describes how children's intellectual abilities evolve through stages.

Justice Perspective

A view that emphasizes fairness, equity, and moral rightness in the consideration of how laws and policies affect people.

Care Perspective

An ethical viewpoint highlighting the importance of interpersonal relationships and the welfare of others in moral deliberation.

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