Reference no: EM132986777

Problem 1: Which statement regarding a lessee's finance lease is true?

a. Amortization expense should be computed using the effective method

b. The capitalized Right of Use asset should include the present value of a bargain purchase option

c. The annual Amortization Expense will be the annual rental payment less the interest portion of that payment

d. The annual Amortization Expense will be an increased amount each year

Problem 2: When treasury stock is bought for more than the par value of the stock, what account(s) should be debited?

Select one:

a. Treasury Stock for the par value and additional paid-in capital for the excess of the cost over the par value

b. Additional paid-in capital for the cost

c. Common Stock for the cost

d. Common Stock for the par value and retained earnings for the excess of the cost over the par value.

e. Treasury Stock for the cost