In a lease that is recorded as a sales-type lease by the lessor,the difference between the gross investment in the lease and sum of the present values of the components of the gross investment should be recognized as income
A)In full at the lease's expiration
B)In full at the lease's inception
C)Over the period of the lease using the interest method of amortization
D)Over the period of the lease using the straight-line method of amortization

Question

Quizplus · Accepted Answer

In a sales-type lease, the lessor recognizes the profit or loss at the lease's inception, as the lease is treated as a sale of the asset.

In a Lease That Is Recorded as a Sales-Type Lease