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NEW QUESTION: 1
EF acquired a copy machine under a three-year operating lease. EF will pay nothing in year one and then will pay $6,000 in years two and three. The estimated economic useful life of the machine is six years.
Which THREE of the following statements are true in respect of how EF will account for its use of the machine and the associated operating lease payments?
A. EF will include an accrual of $4,000 at the end of year one in respect of the lease payments.
B. EF will charge $4,000 to profit or loss in each of the three years in respect of this operating lease.
C. EF will include an accrual of $6,000 at the end of year one in respect of the lease payments.
D. EF will record no expense in year one in respect of the operating lease charges for this machine.
E. EF will record a credit to bank of $6,000 in year two.
F. An asset of $12,000 will be included in EF's property, plant and equipment at the start of the lease.