(Answered) The residual value is the estimated fair value of the

Accounting

The residual value is the estimated fair value of the leased property at the end of the lease term.

(a) Of what significance is (1) an unguaranteed and (2) a guaranteed residual value in the lessee's accounting for a capitalized-lease transaction?

(b) Of what significance is (1) an unguaranteed and (2) a guaranteed residual value in the lessor's accounting for a direct-financing lease transaction?

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