Minimum lease payments are payments the lessee is obligated to make or can be expected to make in connection with the leased property. In computing minimum lease payments, all of the following would be included except the
A) present value of the cost of the leased asset.
B) penalty for failure to renew or extend the lease.
C) bargain purchase option.
D) minimum rental payments.

Question

Quizplus · Accepted Answer

The present value of the cost of the leased asset is not included in the computation of minimum lease payments. Minimum lease payments typically include minimum rental payments, penalties for failure to renew or extend the lease, and the bargain purchase option, but not the present value of the cost of the leased asset itself.

Minimum Lease Payments Are Payments the Lessee Is Obligated to Make