Which of the Following Would Indicate That the Lessee Should

question 23

Multiple Choice

Which of the following would indicate that the lessee should not classify a lease as a capital lease under SFAs No.13?

• A)The fair value of the leased asset is $100,000 and the present value of the minimum lease payments is $95,000.
• B)The lease provides for no unguaranteed salvage value.
• C)The lessee has the option to purchase the leased asset in 4 years for $2 when the asset's salvage value is expected to be $20,000.
• D)The asset's useful life is 20 years;a 4-year lease occurs when the asset is 26 years old.

---

Definitions:

Household System

A system of measurement that includes drops, teaspoons, tablespoons, ounces, cups, pints, quarts, and gallons.

Equivalent

Equal in value, amount, function, meaning, or the like.

Ampicillin

A broad-spectrum penicillin antibiotic used to treat various infections caused by susceptible types of bacteria.

Capsule

A small, soluble container usually made of gelatin that encloses a dose of medication for oral administration.