Eldon Leases Tools and Other Equipment on a Long-Term Basis

question 38

Multiple Choice

Eldon leases tools and other equipment on a long-term basis to construction companies.He needs to buy a new forklift truck to lease in his business.Which of the following describes ways that Eldon could NOT acquire ownership of the forklift truck?

• A)Eldon could buy the forklift truck for cash from the manufacturer.
• B)Eldon could lease the forklift truck from the manufacturer with an option to purchase it for fair market value at the end of the lease.
• C)Eldon could buy the forklift truck on credit from the manufacturer, with the manufacturer retaining title until payment has been made in full.
• D)Eldon could borrow money from a bank, use the money to buy the forklift truck from the manufacturer, and give the bank a security interest in the forklift truck.
• E)Eldon could rent the forklift month by month.