Minnetonka Company leases an asset. Information regarding the lease: The fair value of the asset: is $400,000.
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Question:
- Minnetonka Company leases an asset. Information regarding the lease:
The fair value of the asset: is $400,000. - The useful life of the asset: 6 years with no salvage value.
- The lease term is 5 years.
- Annual lease payments are $60,000
- Implicit interest rate: 11%.
- Minnetonka can purchase the asset at the end of the lease period for $50,000.
What type of lease is this?
Multiple Choice
- Short term.
- Long term.
- Operating.
Related Book For
Intermediate Accounting
ISBN: 978-0470423684
13th Edition
Authors: Donald E. Kieso, Jerry J. Weygandt, And Terry D. Warfield
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