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Unformatted text preview: In the final year of the schedule we must take the residual value out of the lease balance because we are getting the leased asset back at this value. The balance sheet and the income statements are affected in the lease transaction. The balance sheet is not really being affected because we are just taking one asset off the balance sheet and adding a new one to it in the form of a lease receivable for the same amount. The income statement, on the other hand is affected. As time goes by our company is gaining interest revenue and that is making out net income bigger, which is a good thing. There also may be expenses related to the lease, which we may or may not collected from the customer. If we do not collect those expenses our net income will go down....
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This note was uploaded on 04/18/2008 for the course ACCT 302 taught by Professor Borke during the Spring '08 term at Wisc Platteville.
- Spring '08