1. T F Both rent expense and interest expense are recorded by a lessee under a finance lease.

2. T F Off-balance sheet financing means that a company has larger obligations than it shows on its balance sheet.

3. T F U.S. GAAP states that a lease which transfers substantially all of the benefits and risks of an asset to the lessee should be accounted for as an operating lease.

4. T F A bargain purchase option gives the lessee the right to buy the leased property at a deep discount.