In each of the following separate cases, indicate whether the company has a finance lease or an
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Question:
In each of the following separate cases, indicate whether the company has a finance lease or an operating lease.
- The lessee can purchase the leased asset for a minimal $5 payment at the end of the lease, and the lease term is for a major part of the asset's remaining economic life.
- The lease term is 5% of the leased asset's useful life and there is no option for the lessee to purchase the asset.
- The lessor retains title to the asset, and the lease term is 3 years on an asset that has a 10-year useful life.
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