What amount of sales is recognized by the lessor in a sales type lease when the residual value is unguaranteed?
A)Market value of the asset leased.
B)Cost of asset leased less present value of unguaranteed residual value.
C)Cost of asset leased.
D)Market value of asset leased less present value of unguaranteed residual value.

Question

Quizplus · Accepted Answer

In a sales-type lease with an unguaranteed residual value, the lessor recognizes sales revenue as the market value of the asset leased minus the present value of the unguaranteed residual value.

What Amount of Sales Is Recognized by the Lessor in a Sales