The Parent Company Leased a Machine to Its Subsidiary Using $\quad$

question 17

Short Answer

The parent company leased a machine to its subsidiary using a direct-financing lease that included a bargain purchase option.As a result of the intercompany lease, the following items should be eliminated in the consolidation process: ?
$\quad$$\quad$$\quad$$\quad$$\quad$$\quad$$\quad$$\quad$$\quad$$\quad$$\text { Depreciation }$
$\begin{array}{llll}\text { Machine}&\text { Debt }&\text { Interest}&\text { Expense }\\\end{array}$
A) $\begin{array}{llll}\text { Yes } && \text { Yes } & &\text { Yes } && \text { Yes } \\\end{array}$
B) $\begin{array}{llll}\text { Yes } && \text { Yes } && \text { Yes } && \text { No } \\\end{array}$
C) $\begin{array}{llll}\text {Yes } && \text { No }&&& \text { No } && \text { No } \\\end{array}$
D) $\begin{array}{llll}\text { No } && \text { Yes }&& \text { Yes }&& \text { No }\end{array}$

• A)\(\begin{array}{llll}
• \text { Yes } && \text { Yes } & &\text { Yes } && \text { Yes } \\\end{array}\)
• B)\(\begin{array}{llll}\text { Yes } && \text { Yes } && \text { Yes } && \text { No } \\\end{array}\)
• C)\(\begin{array}{llll}\text {Yes } && \text { No }&&& \text { No } && \text { No } \\\end{array}\)
• D)\(\begin{array}{llll}\text { No } && \text { Yes }&& \text { Yes }&& \text { No }
• \end{array}\)

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Definitions:

Groupthink

A psychological phenomenon where the desire for harmony or conformity in a group results in an irrational or dysfunctional decision-making outcome.

Ingratiation

A psychological technique used by an individual to make oneself more likable or attractive to others, often through flattery or other forms of manipulation.

Social Interference

The detrimental influence of the presence or actions of others on an individual's performance or behavior.

Groupthink

A psychological phenomenon in which the desire for harmony in a decision-making group results in an irrational or dysfunctional decision-making outcome.