For the lessor,under a sales-type lease,the excess of the normal sales price (i.e.,current market)of the leased asset over its cost (or carrying amount)should be recognized as revenue by the lessor:

Question

Quizplus · Accepted Answer

Under a sales-type lease, the lessor is effectively selling the leased asset to the lessee, and thus should recognize the profit on the sale at the inception of the lease. This profit is equal to the excess of the normal sales price over the cost (or carrying amount) of the asset, and represents the lessor's revenue for the lease. Therefore, the correct answer is to recognize the revenue in full at the inception date of the lease (choice D).

For the Lessor,under a Sales-Type Lease,the Excess of the Normal