Which of the Following Correctly States a Lease Capitalization Criterion

question 3

Multiple Choice

Which of the following correctly states a lease capitalization criterion from the point of view of the lessee?

• A)Collectibility of the lease payments is reasonably certain.
• B)The present value of the minimum lease payments is equal to 75% or more of the fair value of the leased property.
• C)The lease contains a bargain purchase option.
• D)The lease term is equal to at least 85% of the estimated economic life of the leased asset.

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