Refer to the following lease amortization schedule. The 10 payments are made annually starting with the beginning of the lease. Title does not transfer to the lessee and there is no purchase option or guaranteed residual value. The asset has an expected economic life of 12 years. The lease is noncancelable.

-What would be the outstanding balance after payment 10?
A) $0.
B) $2,028.
C) $8,929.
D) $10,000.

Question

Refer to the following lease amortization schedule. The 10 payments are made annually starting with the beginning of the lease. Title does not transfer to the lessee and there is no purchase option or guaranteed residual value. The asset has an expected economic life of 12 years. The lease is noncancelable.
 
-What would be the outstanding balance after payment 10?
A) $0. 
B) $2,028. 
C) $8,929. 
D) $10,000.

Quizplus · Accepted Answer

The lease is completely amortized at the end of the lease.

Refer to the Following Lease Amortization Schedule