12. Which of the following is not a condition which would require the recording of a lease contract as a capital lease? a. The lease term is less than '?5% of the economic life of the leased property. b. The lease contains a bargain purchase option. c. The lease transfers ownership of the property to the lessee. d. The present value of the lease payments equals or exceeds 30% of the fair market value of the leased property. 13. If the cost method is used to account for a long-term investment in common stock, dividends received should be a. credited to the Stock Investments account. b. credited to the Dividend Revenue account. c. debited to the Stock Investments account. d. recorded only when 20% or more of the stock is owned. 14. When an investor owns between 20% and 50% of the common stock of a corporation, it is generally presumed that the investor a. has insignificant inuence on the investee and that the cost method should be used to account for the investment. b. should apply the cost method in accounting for the investment. c. will prepare consolidated financial statements. d. has significant inuence on the investee and that the equity method should be used to account for the investment. 15. If the equity method is being used, cash dividends received a. are credited to the Stock Investments account. b. require no entry because investee net income has already been recorded at the proper proportion on the investor's books. c. are credited to Dividend Revenue. d. are credited to the Revenue from Investment in Stock account