If a Lessor Borrows Money on a Nonrecourse Basis to Purchase

question 4

Multiple Choice

If a lessor borrows money on a nonrecourse basis to purchase an asset that will be leased to another party,then:

• A)the lessor is responsible for the payments on the borrowed funds whether or not the lessee pays the lease payments.
• B)the lessee must pay both the lease payment and the loan payment.
• C)the loan is considered paid in full if the lessee discontinues making the lease payments or terminates the lease early.
• D)the lessor is only obligated to make loan payments as long as the lessor is collecting the lease payments.
• E)the lessor must pursue the lessee if the lessee fails to make the agreed upon lease payments.

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