Listed below are several terms and phrases associated with leases. Pair each item from List A with the item from List B (by letter) that is most appropriately associated with it.

• List A
• 1. Effective rate times balance
• 2. Revenue recognition issues
• 3. Lease payments plus residual value
• 4. Periodic lease payments plus excess lessee-guaranteed residual value
• 5. PV of lease payments plus PV of residual value
• 6. Initial direct costs
• 7. Rent revenue
• 8. Purchase option
• 9. Leasehold improvements
• 10. Cash expected to satisfy residual value guarantee
• 11. Finance lease expense
• 12. Deducted in lessor's computation of lease payments
• 13. Title transfers to lessee
• 14. Contingent rentals

List B

1. PV of purchase option exercise price
2. Lessor's net investment
3. Lessor's gross investment
4. Operating lease
5. Depreciable assets
6. Component of lease payments
7. Nonlease payments
8. Depreciation longer than lease term
9. Disclosure only
10. Interest expense
11. Control passed to lessee
12. Lessee's lease payments
13. Might shorten lease term
14. Sales-type lease selling expense