Leases in the U.S.should be capitalized on the books of the client if it meets one of four conditions.Which of the following is not one of those four conditions.
A)the lease contract transfers ownership.
B)the lease contains a bargain purchase option.
C)the lease term covers at least 80% of the useful life of the asset.
D)the present value of the minimum lease payments is at least equal to 90% of the assets fair market value.

Question

Quizplus · Accepted Answer

The four conditions that would require capitalization of a lease on the books of the client are:
A)the lease contract transfers ownership.
B)the lease contains a bargain purchase option.
C)the lease term covers at least 75% of the useful life of the asset. (not 80%)
D)the present value of the minimum lease payments is at least equal to 90% of the assets fair market value.