The estimated residual value of a depreciable leased asset at the end of the lease term is:

added to the bargain purchase option at the expiration of the lease.

always guaranteed by either the lessor or the lessee.

an important factor in how the lessor and lessee must account for the lease.

used by the lessor to compute the annual amount of depreciation expense.

Question 12 options:

A lease that is less than 12 months in duration may be classified as long-term if there are substantial penalties for non-renewal.

True

False

Question 13 options:

Which of the following is not included in the initial measurement of a lease liability?

Variable lease payments that change with an index or rate.

Variable lease payments based on usage.

Payments of penalties to terminate the lease.