Jillian Company purchased a van with a fair market value of $55,000 for $40,000 and then leased

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Jillian Company purchased a van with a fair market value of $55,000 for $40,000 and then leased this van for 5 years to the Bryant Corporation. Jillian Company typically resells these vans but has decided lease them as a favor for Bryant Corp. Which of the following statements is true?

Question 11 options:

	A. If the van has an expected life of 8 years, then both parties must report the transaction as a capital lease per US GAAP.
	B. Since this van is normally sold, Bryant must report it as a sales-type lease.
	C. If the van has an expected life of six years, then both parties must report the transaction as a capital lease per US GAAP.
	D. Since this vehicle is normally sold, the lease contract should be recorded as a capital lease by Jillian.

Posted Date: Nov 06, 2021 12:27 AM

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Jillian Company purchased a van with a fair market value of $55,000 for $40,000 and then leased

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Answer c If the van has a expected life of six years then both parti... View the full answer

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