New Mexico Corporation leased equipment under an agreement that qualifies as a finance lease. The present value of the minimum lease payments is $120,000. The lease term is five years. After the expiration of the five year lease, the lease contains a bargain purchase option. The expected economic life of the asset is eight years. Using the straight-line method, what would New Mexico record as annual amortization expense on this leased equipment? A) $24,000 B) $15,000 C) $12,000 D) $30,000

If the lessor records unearned rent (or deferred lease revenue) at the beginning of a lease term, the lease must be: A) A finance lease. B) A sales-type lease without selling profit. C) A sales type lease with selling profit. D) An operating lease