A guaranteed residual value at the inception of a capital lease should be
A)excluded from minimum lease payments.
B)included as part of minimum lease payments at present value.
C)included as part of minimum lease payments at future value.
D)included as part of minimum lease payments only to the extent that guaranteed residual value is expected to exceed estimated residual value.The guaranteed residual value is a promise made by the lessee that the lessor can sell the leased asset at the end of the lease for a guaranteed amount.Since this promise is a potential future payment, it must be included in the calculation of the present value of the lessee's future lease payments.

Question

Quizplus · Accepted Answer

The guaranteed residual value should be included as part of the minimum lease payments at present value, as it represents a potential future payment that the lessee has promised to make to the lessor. By including the guaranteed residual value in the calculation of present value, the total minimum lease payments can be accurately determined.

A Guaranteed Residual Value at the Inception of a Capital