For lessors of sales-type leases, the lease receivable is the present value of payments to be received plus the present value of residual value guarantees.

Question

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In a sales-type lease, the lessor recognizes a lease receivable that includes the present value of lease payments and any guaranteed residual value, reflecting the total expected cash inflows from the lease.

For Lessors of Sales-Type Leases, the Lease Receivable Is the Present