If a lease is classified as a capital lease because the lease agreement contains a bargain purchase option, the time period to be used by the lessee to amortize the leased property is

Question

Quizplus · Accepted Answer

When a lease is classified as a capital lease with a bargain purchase option, the lessee amortizes the leased property over its expected economic life. This is because the bargain purchase option implies that the lessee is likely to purchase the asset at the end of the lease term, effectively making the lessee the owner of the asset for its remaining economic life.

If a Lease Is Classified as a Capital Lease Because