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If the Lessee and the Lessor Use Different Interest Rates

Question 41

Multiple Choice

If the lessee and the lessor use different interest rates to account for a capital lease,then


A) the lease will never be accounted for as a capital lease by the lessee.
B) total expenses (or revenues) will be equal for both lessee and lessor.
C) total expenses (or revenues) will be different for the lessee and the lessor.
D) GAAP has been violated since the lessor and the lessee are not allowed to use different interest rates in accounting for capital leases.

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