In a 5-year finance lease, the amortization expense of the right-of-use asset in the third year is: A) the same as in the fourth year. B) zero. C) less than in the fourth year. D) more than in the fourth year.

In a 5-year finance lease, the amortization expense of the right-of-use asset in the third year is: A) the same as in the fourth year. B) zero. C) less than in the fourth year. D) more than in the fourth year.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Concept explainers

Leasing

Leasing is a contractual arrangement in which someone (a lessee) pays the owner (or lessor) of a building, land, vehicle, or other asset for the use of that asset. The lease is the agreement between lessee and lessor.

Question

In a 5-year finance lease, the amortization expense of the right-of-use asset in the third year is:
A) the same as in the fourth year.
B) zero.
C) less than in the fourth year.
D) more than in the fourth year.
O A
O B
O D

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A.4.