Which of the following is included in the lessor's cash flows but not the lessee's minimum lease payments?
A)bargain purchase option
B)unguaranteed residual value
C)lessee guarantee of residual value
D)third party guarantee of residual

Question

Quizplus · Accepted Answer

Unguaranteed residual value is included in the lessor's cash flows because it represents the value the lessor expects to recover at the end of the lease term that is not guaranteed by the lessee or a third party. This value does not affect the lessee's minimum lease payments because it is not a cost directly borne by the lessee.

Which of the Following Is Included in the Lessor's Cash