Refer to the Following Lease Amortization Schedule

Multiple Choice

Refer to the following lease amortization schedule. The 10 payments are made annually starting with the beginning of the lease. Title does not transfer to the lessee and there is no purchase option or guaranteed residual value. The asset has an expected economic life of 12 years. The lease is noncancelable.

-For a finance lease, an amount equal to the present value of the lease payments should be recorded by the lessee as a(n) :

A) Asset and a liability.
B) Asset and a different amount should be recorded as a liability.
C) Liability and a different amount should be recorded as an asset.
D) Expense.