Lease a Does Not Contain a Bargain Purchase Option, but the Lease

question 94

Short Answer

Lease A does not contain a bargain purchase option, but the lease term is equal to 90 percent of the estimated economic life of the leased property. Lease B does not transfer ownership of the property to the lessee by the end of the lease term, but the lease term is equal to 75 percent of the estimated economic life of the leased property. How should the lessee classify these leases?

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Definitions:

American Core Values

Fundamental beliefs or principles that are widely accepted and upheld within American society, such as freedom, equality, and democracy.

Attitudes

Psychological tendencies expressed by evaluating a particular entity with some degree of favor or disfavor.

Subjective Perception

An individual's personal and biased interpretation of sensory information.

Beliefs

Convictions or acceptances that something exists or is true, especially without proof, playing a significant role in consumer behavior and decision-making.