In a lease that is recorded as a sales-type lease by the lessor, interest revenue
A. should be recognized in full as revenue at the lease's inception.
B. should be recognized over the period of the lease using the straight-line method.
C. should be recognized over the period of the lease using the effective interest method.
D. does NOT arise.
Answer:C
In a lease that is recorded as a sales-type lease by the lessor, interest revenue
A. should be recognized in full as revenue at the lease's inception. B. should be recognized over the period of the lease using the straight-line method. C. should be recognized over the period of the lease using the effective interest method. D. does NOT arise.