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.

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
icon
Related questions
Question

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.

Expert Solution
trending now

Trending now

This is a popular solution!

steps

Step by step

Solved in 2 steps with 1 images

Blurred answer
Knowledge Booster
Lease accounting
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.
Similar questions
  • SEE MORE QUESTIONS
Recommended textbooks for you
FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
Accounting
ISBN:
9781259964947
Author:
Libby
Publisher:
MCG
Accounting
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education