1. A bargain purchase option is defined as the option of purchasing leased property at a price that is equal to the expected fair value of a leased asset. TRUE OR FALSE? 2. If the lessee is expected to take ownership of a leased asset at the end of the lease term, the lessor must record the lease as an operating lease. TRUE OR FALSE? 3. Distinguishing between operating and finance leases is due in large part to the accounting concept of: A) Conservatism. B) Materiality. C) Substance over form. D) Historical cost. On January 1, Sepe Vineyard Supply leased a truck for a five-year period, at which time possession of the truck will revert back to the lessor. Annual lease payments are $11,000 due on December 31 of each year, calculated by the lessor using a 4% discount rate. The lessee interest rate is 5% and the truck economic life is 7 years. What amount, if any, should be recorded as the right-of-use asset (leased asset-truck) and lease liability at the inception under this rental agreement? A) 0 B) $3,000 C) present value of $3,000 D) present value of $11,000 On January 2, 2018, Nori Mining Co. (lessee) entered into a 5-year lease for drilling equipment for $240,000. Nori estimates that the equipment's salvage value will be $20,000 at the end of its 8-year life. For the year ended December 31, 2018, what amount should Nori recognize as amortization expense? A) $27,500 B) $30,000 C) S48,000 D) $46,000 On December 30. year 1. Stratege4U LLC leased equipment under a capital lease. Annual lease payments