Under GAAP, which of the following would not qualify a lease arrangement as a capital lease? The
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Question:
Under GAAP, which of the following would not qualify a lease arrangement as a capital lease?
- The lessee has an option to purchase the leased asset at fair market value
- Ownership of the leased asset is transferred to the lessee at the end of the lease term.
- The term of the lease is 75 percent or more of the leased asset’s economic life (i.e., its productive life)
- The present value of the lease payments discounted by the lessee’s borrowing cost is 90 percent or more of the fair value of the property.
Related Book For
Accounting for Governmental and Nonprofit Entities
ISBN: 978-1259917059
18th edition
Authors: Jacqueline L. Reck, James E. Rooks, Suzanne Lowensohn, Daniel Neely
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