Timely Limited Accepts a Lease Incentive to Enter into a 4-Year

question 20

Multiple Choice

Timely Limited accepts a lease incentive to enter into a 4-year operating lease for equipment.The incentive is cash amounting to $10 000 that will be paid on the date the lease agreement is signed.On inception of the lease,the lessor will record:

• A)DR Cash $10 000 CR Incentive to lessee $10 000
• B)DR Incentive to lessee $10 000 CR Cash $10 000
• C)DR Rent income $10 000 CR Rent expense $10 000
• D)DR Cash $10 000 CR Rent income $10 000

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