Question
Assume that an asset being leased is expected to have a residual value at the end of the lease term. What will be the impact
Assume that an asset being leased is expected to have a residual value at the end of the lease term. What will be the impact of the residual value? (Select all that apply.)
Check All That Apply
1. It will cause the lease payments by the lessee to be higher.
2. It will affect the lessor’s accounting for the lease.
3. At the beginning of the lease, the lessor will add the present value of the residual value to the amount of the lease receivable that would otherwise be recorded under the lease.
4. A gain or loss will be recorded at the end of the lease if the actual residual value is different than that estimated.
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Modern Portfolio Theory and Investment Analysis
Authors: Edwin Elton, Martin Gruber, Stephen Brown, William Goetzmann
9th edition
9781118805800, 1118469941, 1118805801, 978-1118469941
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