1) Which of the following is not true with an operating lease?

a. Other operating costs that are incurred during the period are charged to expense

b. Depreciation charges that are incurred during the period are not charged to expense

c. The lessor records each rental receipt as rental income

d. Maintenance costs that are incurred during the period are charged to expense

2) The lessee, under ASPE, records a capital lease as an asset and a liability at the

a. present value of the lease payments.

b. total amount of the lease payments.

c. lower of the present value of the lease payments and the fair market value of the leased asset.

d. fair market value of the leased asset at the lease inception.