Which of the Following Amortization Policies Is Correct for a Capital

Multiple Choice

Which of the following amortization policies is correct for a capital lease of both land and buildings that transfers title or contains a bargain purchase option?

A) The total capitalized cost of the lease less any expected residual value is allocated over the expected economic life of the assets.
B) The total capitalized cost of the lease less any expected residual value is allocated over the lease term.
C) An amount is assigned to Leased Buildings that is depreciated over the lease term, and the amount assigned to Leased Land is not depreciated.
D) An amount is assigned to Leased Buildings that is depreciated over the expected economic life of the asset, and the amount assigned to Leased Land is not depreciated.