An Eight-Year Capital Lease Specifies Equal Minimum Annual Lease Payments

question 66

Multiple Choice

An eight-year capital lease specifies equal minimum annual lease payments.Part of this payment represents interest and part represents a reduction in the net lease liability.The portion of the minimum lease payment in the fourth year applicable to the reduction of the net lease liability should be

• A) the same as in the third year.
• B) less than in the third year.
• C) less than in the fifth year.
• D) more than in the fifth year.

---

Definitions:

Vividly Remembered

The act of recalling memories with exceptional clarity and detail, as if experiencing the moment all over again.

Misleading Information

Refers to false or deceptive information that can affect memory, perception, or understanding, often studied in the context of eyewitness testimony and media.

Loftus

Elizabeth Loftus is a cognitive psychologist and expert on human memory, known for her research on the malleability of human memory and the misinformation effect.

Recall

The act of retrieving information or memories from the past, without the aid of specific cues for what is being remembered.