If the Lessee Expects to Obtain Title to Leased Property

Multiple Choice

If the lessee expects to obtain title to leased property due to a purchase option that is reasonably certain to be exercised or the passage of title at the end of the lease term:

A) The lessee ignores any residual value for the leased property.
B) The lessor ignores any residual value for the leased property.
C) The lessee adds the present value of the residual value to the amount recorded for the lease.
D) The lessor will always charge a higher annual lease rate.