Out2B Company signed an 4-year lease agreement for new vehicle with LeaseCo. The leasing contract amount to $64.000. At the end of the lease term, the vehicle will revert back to the LeaseCo. The vehicle has a useful life of 5 years and has no salvage value. When signing the lease agreement, the equipment has a fair value of $67,500. An interest rate of 5% and straight-line depreciation are used.

What type of lease is this? Explain.

Answer rating: 100% (QA)

Answer I The given lease is a Capital Lease Explanation i There are four test... View the full answer