26. The primary difference between a direct-financing lease and a sales-type lease is the A) amount of the depreciation recorded each year by the lessor B) manner in which rental receipts are recorded as rental income. C) recognition of the manufacturer's or dealer's profit at the inception of the lease. D) allocation of initial direct costs by the lessor to periods benefited by the lease arrangements. 27. The Lease Liability account should be disclosed as A) B) C) D) all noncurrent liabilities. all current liabilities. current portions in current liabilities and the remainder in noncurrent liabilities. deferred credits. Use the following to answer question 28: On January 1, 2016, Yancey, Inc. signs a 10-year noncancelable lease agreement to lease a storage building from Holt Warehouse Company. Collectibility of lease payments is reasonably predictable and no important uncertainties surround the amount of costs yet to be incurred by the lessor. The following information pertains to this lease agreement. (a) The agreement requires equal rental payments at the end of each year. (b) The fair value of the building on January 1,2016 is $4,000,000; however, the book value to Holt is $3, (c) The building has an estimated economic life of 10 years, with no residual value. Yancey depreciates sir buildings on the straight-line method (d) At the termination of the lease, the title to the building will be transferred to the lessee. (e) Yancey's incremental borrowing rate is 1 1% per year. Holt warehouse Co. set the annual rental to insu rate of return. The implicit rate of the lessor is known by Yancey, Inc. The yearly rental payment includes $10,000 of executory costs related to taxes on the property. ( 28. From the lessee's viewpoint, what type of lease exists in this case? A) Sales-type lease B) Capital lease C) Sale-leaseback D) Operating lease