If the Present Value of Lease Payments Equals or Exceeds

question 79

Multiple Choice

If the present value of lease payments equals or exceeds 90% of the fair market value of the leased property, the

• A) conditions are met for the lease to be considered a capital lease.
• B) lease is uneconomical and should not be entered into.
• C) lease may be classified as an operating lease.
• D) recording of a lease liability is optional-that is, the off-balance sheet approach can be elected.

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