QUESTION 38 Technoid Inc. sells computer systems. Technoid leases computers to Lone Star Company on January 1, 2016. The manufacturing cost of the million. This noncancelable lease had the following terms: Lease payments: $2,466,754 semiannually, first payment at January 1, 2016; remaining payments at June 30 and December 31 each year tt Lease term: five years (10 semiannual payments). - No residual value; no bargain purchase option. - Economic life of equipment: five years. Implicit interest rate and lessee's incremental borrowing rate: 5% semiannually. - Fair value of the computers at January 1, 2016: $20 million. Collectibility of the rental payments is reasonably assured, and there are no lessor costs yet to be incurred. Lone Star Company would account for this as: O A capital lease. O A direct financing lease. A sales type lease. An operating lease. QUESTION 39 When tax rates are changed subsequent to the creation of a deferred tax asset or liability, GAAP requires that: All deferred tax accounts be adjusted to reflect the new tax rates. The beginning deferred tax accounts are left unchanged. Only the current deferred tax accounts are adjusted to reflect the new tax rates. Only the noncurrent deferred tax accounts are adjusted to reflect the new tax rates