Which of the Following Lease Conditions Would Result in a Capital

question 6

Multiple Choice

Which of the following lease conditions would result in a capital lease to the lessee?

• A) The lessee will return the property to the lessor at the end of the lease term.
• B) The lessee obtains enough rights to use the asset and is in substance the owner.
• C) The leased asset is not capitalized on the balance sheet.
• D) The lease term is 70% of the property's economic life.

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