Related to Direct Financing Leases

question 92

Multiple Choice

Related to direct financing leases

• A)the net investment in the lease should be adjusted each year by material increases (but not decreases)in estimated unguaranteed residual values
• B)the lessor only reports interest revenue on the income statement
• C)initial direct costs result in an increase in Unearned Interest Revenue-Leases by an amount equal to these costs in the year the costs are incurred
• D)the lessor's gross margin is amortized over the life of the lease

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