For a direct-financing lease, the gross investment of the lessor is equal to the a. Present value of the minimum lease payments minus the unguaranteed residual value accruing to the lessor at the end of the lease term. b. Lower of 90% of the present value of the minimum lease payments or the fair value of the leased asset. c. Difference between the fair value of the leased asset and the deferred interest revenue. d. Minimum lease payments plus the unguaranteed residual value accruing to the lessor at the end of the lease term.
For a direct-financing lease, the gross investment of the lessor is equal to the a. Present value of the minimum lease payments minus the unguaranteed residual value accruing to the lessor at the end of the lease term. b. Lower of 90% of the present value of the minimum lease payments or the fair value of the leased asset. c. Difference between the fair value of the leased asset and the deferred interest revenue. d. Minimum lease payments plus the unguaranteed residual value accruing to the lessor at the end of the lease term.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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For a direct-financing lease, the gross investment of the lessor is equal to the
a. Present value of the minimum lease payments minus the unguaranteed residual value accruing to the lessor
at the end of the lease term.
b. Lower of 90% of the present value of the minimum lease payments or the fair value of the leased asset.
c. Difference between the fair value of the leased asset and the deferred interest revenue.
d. Minimum lease payments plus the unguaranteed residual value accruing to the lessor at the end of the
lease term.
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