Consider the following questions:
1. Can the present value of minimum lease payments differ between the lessor and lessee? If so, how?
2. Compare the way a bargain purchase option and a residual value are treated by the lessee when determining minimum lease payments.
3. What are executory costs? How are they accounted for by the lessee in a capital lease when paid by the lessee? When paid by the lessor? Explain.
If possible, please give examples to better understand your response.