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A Six-Year Operating Lease Requires Annual Rent Payments of $15

Question 32

Multiple Choice

A six-year operating lease requires annual rent payments of $15, 000 for years 1, 2, and 3, and annual rent payments of $10, 000 for years 4, 5, and 6.The agreement also requires the lessor to pay a $1, 800 annual insurance premium for the leased property.Which of the following amounts should be recognized as the rental revenue in year 1 by the lessor?


A) $10, 000
B) $13, 500
C) $15, 000
D) $16, 800

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