13. The costs that (a) are associated directly with consummating a lease, (b) are essential to acquire the lease, and (c) would not have been incurred had the lease agreement not occurred, are referred to as initial direct costs. Initial direct costs incurred by the lessor are deferred and expensed over the lease term: A. Only in an operating lease. B. Only in a sales-type lease with selling profit. C. Only in a sales-type lease with no selling profit. D. In both an operating lease and a sales-type lease with no selling profit. 14. On January 1, 2021, Queen Corporation leased equipment to Prince Company. The lease term is 10 years. The first payment of $688,000 was made on January 1, 2021 and all other payments are due on December 31 of each year. The equipment costs Queen Corporation $3,898,569. The present value of the lease payments is $4,218,579. The lease is appropriately classified as a sales-type lease. Assuming the interest rate for this lease is 13%, how much interest revenue will Queen record in 2022 on this lease? (Round your answer to the nearest whole dollar amount.) A. $229,025. B. $433,712. C. $458,975. D. $429,202.

On January 1, 2018, Riley Corp. leased equipment under a finance lease. Annual lease payments of $30,000 are due on each January 1 for 10 years. The equipment's useful life is 10 years, and the interest rate implicit in the lease is 10%. The lease payable was initially recorded on January 1, 2018, at $202,771, and the first lease payment was made on that date. What amount of lease payable should Riley include in current liabilities for this finance lease in its December 31, 2018 balance sheet? A. $160,048. B. $17,277. C. $30,000. D. $12,723.