If the lessor and lessee use different interest rates to account for a finance lease, then:
A)total expenses (or revenues)will be equal for each.
B)total expenses (or revenues)will be different for each.
C)the lessee and lessor cannot use different interest rates.
D)the lessor will use different account titles to record the leasing transaction.

Question

Quizplus · Accepted Answer

When the lessor and lessee use different interest rates to account for a finance lease, the total expenses (for the lessee) and total revenues (for the lessor) will be different for each. This is because the interest rate affects the calculation of the lease payments and the interest expense or income recognized over the lease term. Different rates lead to different amounts being recognized in their financial statements over time.

If the Lessor and Lessee Use Different Interest Rates to Account