One of the four general criteria for a capital lease is that the present value at the beginning of the lease term of the minimum lease payments equals or exceeds
A) the property's fair market value.
B) 90 percent of the property's fair market value.
C) 75 percent of the property's fair market value.
D) 50 percent of the property's fair market value.

Question

Quizplus · Accepted Answer

One of the criteria for a lease to be classified as a capital lease (or finance lease under newer standards) is that the present value of the minimum lease payments at the beginning of the lease term equals or exceeds 90 percent of the fair value of the leased property.

One of the Four General Criteria for a Capital Lease