Examlex
In preparing closing entries
Capital Lease
A lease classified as a purchase by the lessee, whereby the lessee records the leased asset as an owned asset on the balance sheet.
Bargain Purchase Option
A lease agreement provision allowing the lessee to purchase the leased asset at a price significantly lower than its expected fair market value at the end of the lease term.
Long-term Liability
A long-term liability is a financial obligation of a company that is due beyond one year, such as bonds payable, long-term leases, and pension obligations.
Capital Lease Obligations
Long-term lease agreements that are recorded as assets on a company's balance sheet, effectively treating the lease as a purchase of the asset.
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