The Amount of a Lease Receivable Recorded by the Lessor

question 23

Multiple Choice

The amount of a lease receivable recorded by the lessor for a direct finance lease should equal at the beginning of the lease term:

• A) the aggregate of the present value of the minimum lease and executory payments and the present value of any unguaranteed residual value expected to accrue to the benefit of the lessor at the end of the lease term.
• B) the aggregate of the present value of the minimum lease payments and the present value of any unguaranteed residual value expected to accrue to the benefit of the lessor at the end of the lease term. Any initial direct costs should also be included in the lease receivable.
• C) the aggregate of the present value of the total lease payments and the present value of any guaranteed residual value expected to accrue to the benefit of the lessor at the end of the lease term.
• D) the aggregate of the present value of the minimum lease payments and the present value of any guaranteed residual value expected to accrue to the benefit of the lessor at the end of the lease term, plus any initial direct costs.

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Definitions:

Z > -1.82

A condition referring to the area under the normal distribution curve to the right of Z = -1.82, indicating values above this Z-score.

Median Score

The middle value in a data set when the values are arranged in ascending or descending order, effectively splitting the dataset into two halves.

Boxplot

A graphical representation of data that shows the distribution's five key summary points: minimum, first quartile, median, third quartile, and maximum.

Corresponding

Relating to or denoting elements or objects that are equivalent or similar in position, function, or characteristics.