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Lease contracts entered into by New Inc., a lessee, specify that the lessor is to...

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Accounting

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Lease contracts entered into by New Inc., a lessee, specify that the lessor is to pay hazard insurance premiums. These costs are embedded in the periodic payments. New Inc.'s policy is to independently expense these costs rather than capitalize them as part of the right-of-use asset. Which of the following is an accurate statement regarding the company's policy? The policy is inappropriate because those payments do not transfer to the lessee a separate good or service. a. b. The policy is appropriate because the lessee is given the option to elect to include nonlease components. This approach is inappropriate because lessor had to make these payments. C. The policy is appropriate because those payments transfer to the lessee a separate good or service. d. The policy is appropriate because the charge qualifies as a "nonlease component" of the payment and is separated from the lease e. payments

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