On January 1, 2016, Renee Corp

Multiple Choice

On January 1, 2016, Renee Corp., a lessee, signed a five-year capital lease for new equipment. The lease requires annual payments of $8,000. The first payment is due on December 31, 2016. Renee guaranteed a residual value of $2,000. On December 31, 2020, Renee returned the asset to the lessor, and the asset was appraised at a value of
$1,500. Renee should record which of the following on December 31, 2020?

A) a $1,500 credit to leased equipment
B) a $500 debit to loss on disposal of leased equipment
C) a $500 debit to cash
D) a $1,500 credit to cash