Which of the following lease conditions would result in a finance lease to the lessee?
Which of the following lease conditions would result in a finance lease to the lessee?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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18.
Which of the following lease conditions would result in a finance lease to the lessee?
a.The fair market value of the property at the inception of the lease is $18,000; the present value of the minimum lease payments is $16,000.
b.The lease term is 70% of the property's economic life.
c.The lessee will return the property to the lessor at the end of the lease term.
d.The lessee can purchase the property for $1 at the end of the lease term.
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