III. True or False (2 pts) 1. Leasing equipment reduces the risk of obsolescence to the lessee and in many cases passes the risk of residual value to the lessor. 2. The FASB agrees with the capitalization approach and requires companies to capitalize all long-term leases. 3. Minimum rental payments are the same as the lease payments. 4. A benefit of leasing to the lessor is the return of the leased property at the end of the lease term. 5. In an operating lease, the lessee reports both interest expense and amortization expense on the income statement. 6. If a lease does not transfer control of the asset over the lease term, the lessor will generally account for the lease as a sales-type lease. 7. The basic difference between a direct-financing lease and a sales-type lease relates to the recognition of the profit on the sale.