In dicate each of the following statements as true or false. 1.→Lease Term refers to the fixed and cancelable term of the lease. 2.→Henry Company leases machines to Zoe Company. The contract states that the lease term is two years, with a rental payment of $10,000 per month. If Zoe continues to rent after the two-year term, the rental payment will be reduced to $1,000 per month for another two years. In this case, the real lease term is two years. 3.→Leasing equipment reduces the risk of obsolescence to the lessee and in many cases passes the risk of residual value to the lessor.

In dicate each of the following statements as true or false. 1.→Lease Term refers to the fixed and cancelable term of the lease. 2.→Henry Company leases machines to Zoe Company. The contract states that the lease term is two years, with a rental payment of $10,000 per month. If Zoe continues to rent after the two-year term, the rental payment will be reduced to $1,000 per month for another two years. In this case, the real lease term is two years. 3.→Leasing equipment reduces the risk of obsolescence to the lessee and in many cases passes the risk of residual value to the lessor.

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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