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Source Inc. (lessor) entered in a lease agreement of equipment for a 5- year period with Lemon Inc. (lessee). The lease is properly classified as
Source Inc. (lessor) entered in a lease agreement of equipment for a 5- year period with Lemon Inc. (lessee). The lease is properly classified as an operating lease by Source Inc. Lease payments were structured as follows: Year One: $7,000 Year Two: $14,000 Year Three: $10,000 Year Four: $12,000 Year Five: $12,500 What is the amount of lease revenue recognized in Year One and Year Two by Source Inc.? Year One Year Two A. $6,000 $10,000 B. $11,100 $11,100 C.$10,100 $10,100 D. $12,500 $10,000
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