1. Indicate the account(s) closed at the end of an accounting period

a. Billings, but not Construction in Process

b. Construction in Process, but not Billings

c. Both Billings and Construction in Process

d. Neither Billings nor Construction in Process

2. A 12-year capital lease specifies equal minimum annual lease payments. Part of this payment represents interest and part represents a reduction in the net lease liability. The portion of the minimum lease payment in year 10 applicable to lease liability should be:

a. Less than in year 8

b. The same as in year 8

c. Less than in year 12

d. More than in year 12

3. Assume a capital lease. The lessee's interest rate is 6%, the lessor's interest rate is 5%. Neither lessee nor lessor is aware of the other's rate. Indicate the rate to be used by the lessee and lessor, respectively.

a. 5%, 5%

b. 6%, 5%

c. 5%, 6%

d. 6%, 6%