Choose the correct statement about an unguaranteed residual in a lease. a. the l
ID: 2541310 • Letter: C
Question
Choose the correct statement about an unguaranteed residual in a lease.
a. the lease contract specifies the amount of the unguaranteed residual
b. the unguaranteed residual is not included in the lessor’s minimum lease payments but is included in the lease receivable if the lease is capitalized
c. the unguaranteed residual is not a factor to be included in the lessor’s equation for purposes of computing the annual lease payment (LP)
d. the unguaranteed residual is one of the factors that could cause the two parties to account for the lease differently (one capital, one operating)
e. the unguaranteed residual value is not used in the accounting for capital leases because at inception it is an uncertain amount
a. the lease contract specifies the amount of the unguaranteed residual
b. the unguaranteed residual is not included in the lessor’s minimum lease payments but is included in the lease receivable if the lease is capitalized
c. the unguaranteed residual is not a factor to be included in the lessor’s equation for purposes of computing the annual lease payment (LP)
d. the unguaranteed residual is one of the factors that could cause the two parties to account for the lease differently (one capital, one operating)
e. the unguaranteed residual value is not used in the accounting for capital leases because at inception it is an uncertain amount
Explanation / Answer
e. the unguaranteed residual value is not used in the accounting for capital leases because at inception it is an uncertain amount.