If a Lease Transfers Ownership of the Property to the Lessee

question 132

True/False

If a lease transfers ownership of the property to the lessee at the end of the lease term,it should be regarded as an operating lease.

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Definitions:

Yields To Maturity

The total return anticipated on a bond if the bond is held until it matures, including all interest payments and the repayment of principal.

Par Value

The face value of a bond or stock as stated on the certificate or instrument, not necessarily its market value.

Mature

Refers to when a bond reaches its expiry date-payback or when a market or company has reached a state of equilibrium with little growth.

Subordinated Debenture

A type of unsecured debt that ranks below other debts and securities in terms of claims on assets or earnings in the event of a liquidation.