Indicate which of the following leases would be a capital (financing) lease and which would be an operating lease:
1. Rental of a warehouse for $10,000 per month, renewable annually.
2. Rental of a crane for $9,000 per month on a 6-year lease, with an option to buy for $10,000 at the end of the 6 years when its fair value is $150,000.
3. Rental of an automobile on a 6-month lease for $500 per month. The auto will be returned to the dealer after the 6 months.
4. Rental of a computer for $500 per month on a 5-year lease. At the end of 5 years, the computer is expected to have a fair market value of zero.
5. Rental of 10 forklifts for $1,400 per month on an 8-year lease. The value of the forklifts at the end of 8 years is uncertain, but the total economic life is not expected to be more than 10 years.

  • CreatedFebruary 20, 2015
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