Assume That Speery Agrees to Lease a New Machine from LEERY

question 84

Multiple Choice

Assume that Speery agrees to lease a new machine from LEERY on January 1,2017,for $30,000 per year,paid in advance (i.e. ,at the beginning of the year) .The lease term is 10 years and the asset's useful life is 8 years.There is no bargain purchase option.The unguaranteed residual value is $10,000.Which statement is correct?

• A)The unguaranteed residual will be recorded on Speery's balance sheet.
• B)The lease is an operating lease.
• C)The lease is a finance lease.
• D)More information is needed to determine the accounting treatment.

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Definitions:

Behavior Therapist

A type of therapist who specializes in the treatment of psychological disorders by changing maladaptive behaviors into healthier ones.

Rational-Emotive Therapy

A type of cognitive-behavioral therapy that focuses on identifying and changing irrational beliefs and thought patterns.

Emotional Difficulty

A broad term encompassing challenges in experiencing, expressing, or managing emotions.

Humanistic Therapy

A psychological therapy approach that emphasizes personal growth and self-actualization, focusing on the individual's capacity for self-awareness and choice.