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Which is most correct if a lessee capitalizes a lease

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Reference no: EM132656289

Problem 1: According to U.S. GAAP, all of the following would require finance lease treatment by the lessee except:

A) the lease contains a purchase option.

B) ownership of the leased asset transfers to the lessee at the end of the lease.

C) the lease term covers a major portion of the asset's useful life.

Problem 2: Which of the following is most correct if a lessee capitalizes a lease?

A) Current assets increase.

B) Current liabilities increase.

C) Current liabilities decrease.

Problem 3: If a firm reacquires its outstanding debt for an amount that is less than the book value of the debt, the resultant:

A) gain is recognized in shareholders' equity as "other comprehensive income."

B) loss is recognized as a component of earnings.

C) gain is recognized as a component of earnings.

Reference no: EM132656289

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