1.

The difference in the lessors income recognition over the life of the lease, between an operating lease and a capital lease is:

• zero.

• the amount of the interest revenue.

• the financing revenue minus the depreciation.

• the depreciation expense.

2.

Which of the following is correct with respect to ASU 842 for lease accounting?

• It retained the distinction between operating and finance leases for lessees.

• It is mandatory for fiscal years beginning after December 15, 2018 and may not be adopted early.

• It requires the lessee to record a prepaid asset and a lease liability.

• It allows the lessee to decide what borrowing rate to use to value the lease