. What impact does a bargain purchase option have on the present value of the lease payments computed by the lessee? The lease payments would be increased by the option price. The lessee must increase the present value of the lease payments by the present value of the option price. There is no impact as the option does not enter into the transaction until the end of the lease term. The lessee must decrease the present value of the lease payments by the present value of the option price.
. What impact does a bargain purchase option have on the present value of the lease payments computed by the lessee? The lease payments would be increased by the option price. The lessee must increase the present value of the lease payments by the present value of the option price. There is no impact as the option does not enter into the transaction until the end of the lease term. The lessee must decrease the present value of the lease payments by the present value of the option price.
Intermediate Accounting: Reporting And Analysis
3rd Edition
ISBN:9781337788281
Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Chapter20: Accounting For Leases
Section: Chapter Questions
Problem 8RE: Use the following information to decide whether this equipment lease qualifies as an operating,...
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29.
What impact does a bargain purchase option have on the present value of the lease payments computed by the lessee?
The lease payments would be increased by the option price.
The lessee must increase the present value of the lease payments by the present value of the option price.
There is no impact as the option does not enter into the transaction until the end of the lease term.
The lessee must decrease the present value of the lease payments by the present value of the option price.
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