If a Lessee Does Not Exercise a Bargain Purchase Option

If a lessee does not exercise a bargain purchase option prior to its lapse date,the:

A) lessee continues to record depreciation on the lease asset because it was assumed from the beginning that the lessee would retain ownership of the asset.
B) bargain purchase option cannot lapse because this option was included in computing the annual rental amounts.
C) lessee recognizes a loss due to the lapse.
D) lessee recognizes a gain due to the lapse.

Correct Answer:

Verified

Unlock this answer now
Get Access to more Verified Answers free of charge

Access For Free