For a direct-finance capital lease, the lease receivable is the present value of the minimum lease payments plus an element of gross profit.

Name: For a direct-finance capital lease, the lease receivable is the present value of the minimum lease payments plus an element of gross profit.
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In a direct-finance lease, the lease receivable is the present value of the minimum lease payments, but it does not include an element of gross profit. Gross profit is recognized over the lease term.

For a Direct-Finance Capital Lease, the Lease Receivable Is the Present