1 question 2 parts

One reason for the treatment of a lease as a finance/capital lease (if applicable criteria met) is: To recognize that some transactions although formed as a lease are in fact in substance a deferred purchase. O To recognize that some transactions although formed as a lease are just rental agreements. O To recognize interest expense as a function of the carrying value of the debt. To recognize that some transactions although formed as a lease cannot be classified in any one way. When there is a bargain purchase option for a capital/finance lease interest expense will be than if there is no bargain purchase option for the same set of facts. O lower higher no difference unable to determine