The initial amount recorded by a lessee as a liability in a finance lease should:
A. Exceed the present value at the beginning of the lease term of minimum lease payments during the lease term.
B. Exceed the total of the minimum lease payments during the lease term.
C. Not exceed the fair value of the leased property at the inception of the lease.
D. Equal the total of the minimum lease payments during the lease term.
Answer:C
The initial amount recorded by a lessee as a liability in a finance lease should:
A. Exceed the present value at the beginning of the lease term of minimum lease payments during the lease term. B. Exceed the total of the minimum lease payments during the lease term. C. Not exceed the fair value of the leased property at the inception of the lease. D. Equal the total of the minimum lease payments during the lease term.