Which of the following statements regarding the calculation of the lessee's depreciation expense for a capital lease is true?
A. The bargain purchase option price is deducted from the original cost capitalized, and the difference is allocated over the estimated economic life of the asset.
B. The guaranteed residual value is deducted from the original cost capitalized, and the difference is allocated over the estimated economic life of the asset.
C. The unguaranteed residual value is deducted from the original cost capitalized, and the difference is allocated over the term of the lease.
D. The guaranteed residual value is deducted from the original cost capitalized, and the difference is allocated over the term of the lease.
Answer: D
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