Which item(s) is (are) included in the computation of the lessee’s present value of minimum lease...

Which item(s) is (are) included in the computation of the lessee’s present value of minimum lease payments?

Select one:

a. Executory costs, but not guaranteed salvage value

b. Guaranteed Salvage Value, but not Executory Costs

c. Both Executory Costs and guaranteed Salvage Value

d. Neither Executory Costs nor guaranteed Salvage Value

Solutions

Expert Solution

Minimum lease payments are rental payments over the lease term including the amount of any bargain purchase option, premium, and any guaranteed residual value and excluding any rental relating to costs

Executory cost are the costs of an ongoing lease agreement and shall not be included in minimum lease payments

whereas it can include guaranteed residual value as it is already included in the definition of Minimum lease payments.

ekkarill92 answered 1 year ago

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