Which one of the following is one of the capital lease criteria?
A)The lease term is 75% or more of the useful life of the leased property.
B)Ownership of the property is transferred back to lessor at the end of the lease term.
C)The present value of the lease payments equals or exceeds 75% of the FMV of the property.
D)The lease does not contain a bargain purchase option.

Question

Quizplus · Accepted Answer

One of the capital lease criteria is that the lease term should be 75% or more of the useful life of the leased property. This is an indicator that the lessee is essentially purchasing the property through the lease and should classify it as a capital lease. The other options listed do not accurately describe a capital lease criterion.

Which One of the Following Is One of the Capital