If the Lessee Expects to Obtain Title to Leased Property

question 103

Multiple Choice

If the lessee expects to obtain title to leased property due to a bargain purchase option or passage of title at the end of the lease term:

• A)The lessee ignores any residual value for the leased property.
• B)The lessor ignores any residual value for the leased property.
• C)The lessee adds the present value of the residual value to the amount recorded for the lease.
• D)The lessor will always charge a higher annual lease rate.

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