If the residual value of a leased asset turns out to be more than the amount guaranteed by the lessee,the:

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Quizplus · Accepted Answer

When the residual value of a leased asset turns out to be more than the amount guaranteed by the lessee, the lessor is not obligated to compensate the lessee for the excess. This is because the lessee takes on the risk of the asset's value at the end of the lease period and their payments are structured accordingly. Therefore, option B is the correct choice. Option A is incorrect because a prior period adjustment would not be appropriate - it would only be necessary if the residual value was less than anticipated. Option C is incorrect because the lessor is not responsible for paying the lessee any excess amount. Option D is also incorrect because the rental payments are predetermined and cannot be reduced based on the asset's residual value at the end of the lease.

If the Residual Value of a Leased Asset Turns Out