Use the Following Information for Questions

question 68

Short Answer

Use the following information for questions.
Yueve's Company is negotiating three leases for store locations Yueve's incremental borrowing rate is 12 percent and the lessor's implicit rate is unkown (it is impracticable to determine)
Each store will have an economic useful life of 30 years.lease payments will be made at the end of each year.Based on the data below properly classify each of the leases as an operating lease or a finance lease.The purchase price for each property is listed as an alternative to leasing.

-Based on this information, which test(s) does Location B pass for classifying the lease as a finance lease.

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Definitions:

Trailer Hand Control

A device installed in towing vehicles for manual control of a trailer’s brakes independently of the vehicle's brakes.

Service Brakes

The primary braking system used in vehicles for normal stopping operations, as opposed to auxiliary systems like parking or emergency brakes.

Foundation Brakes

The braking components downstream from the actuator that mechanically effect braking on a wheel. In a truck S-cam brake assembly, the foundation brakes consist of a slack adjuster, an S-camshaft, brake shoes, and a drum.

S-Cam-Actuated

Describes a type of brake system, particularly in heavy vehicles, where the braking action is initiated by the rotation of an S-shaped cam.