Companies that use sales-type leases recognize income later than if a direct-financing lease is used.

Name: Companies that use sales-type leases recognize income later than if a direct-financing lease is used.
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Question

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In a sales-type lease, companies recognize profit from the sale and interest income over the lease term, whereas in a direct-financing lease, only interest income is recognized over the term, making income recognition earlier in a sales-type lease.

Companies That Use Sales-Type Leases Recognize Income Later Than If