What Is a Capitalized Lease

question 76

Multiple Choice

What is a capitalized lease?

• A) A financial lease where the present value of the lease payments include the cost of servicing and maintaining the leased asset.
• B) An operating lease where the fair market value of the leased asset at the end of the lease term is subtracted from the present value of the lease payments.
• C) A financial lease that has the present value of the lease payments included as an asset and as an offsetting liability on the company's balance sheet.
• D) An operating lease where the present value of of the lease payments is greater than the purchase cost of the leased asset.

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Definitions:

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