Multiple Choice
Assume that Speery agrees to lease a new machine from LEERY on January 1,2011,for $30,000 per year,paid in advance (i.e.,at the beginning of the year) .The lease term is 10 years and the asset's useful life is 8 years.There is no bargain purchase option.The unguaranteed residual value is $10,000.Which statement is correct?
A) The unguaranteed residual will be recorded on Speery's balance sheet.
B) The lease is an operating lease.
C) The lease is a finance lease.
D) More information is needed to determine the accounting treatment.
Correct Answer:
Verified
Correct Answer:
Verified
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