Question: Sales-type leases and direct financing leases are two common types of leases from a lessors perspective. Required: Compare and contrast a sales-type lease with a

Sales-type leases and direct financing leases are two common types of leases from a lessor’s perspective.

Required:

Compare and contrast a sales-type lease with a direct-financing lease on the following dimensions:

a. Gross investment in the lease.

b. Amortization of unearned interest income.

c. Manufacturer’s or dealer’s profit.

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