Question
1.Which of the following statements concerning unguaranteed residual value is appropriate for the lessee? A. Right of use asset and lease liability should be increased
1.Which of the following statements concerning unguaranteed residual value is appropriate for the lessee?
A. Right of use asset and lease liability should be increased by the absolute amount of the residual value.
B. Right of use asset and lease liability should be increased by the present value of the residual value.
C. Right of use asset and lease liability should be decreased by the absolute amount of the residual value.
D. Right of use asset and lease liability should be decreased by the present value of the residual value.
E. The residual value should not be accounted for.
Which of the following statements concerning the partial termination of the lease are correct?
I. If the decrease in carrying amount of lease liability is higher than the decrease in carrying amount of right of use asset, the difference is a termination loss.
II. If the decrease in carrying amount of lease liability is higher than the decrease in carrying amount of right of use asset, the difference is a termination gain.
III. If the decrease in carrying amount of right of use asset is higher than the decrease in carrying amount of lease liability, the difference is a termination loss.
IV. If the decrease in carrying amount of right of use asset is higher than the decrease in carrying amount of lease liability, the difference is a termination gain.
A. I and IV
B. II and III
C. I and III
D. II and IV
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