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Fieldway Turf Inc

Question 52

Multiple Choice

Fieldway Turf Inc.has leased an excavator for a 5-year period.The excavator has an estimated useful life of 15 years and a current market value of $125,000.At the end of the lease Fieldway can buy the asset for its market value at that time.How should Fieldway account for the lease? As an)


A) finance lease because the market value of the asset is known.
B) finance lease because they will own the asset at the end of the lease.
C) operating lease because they might not purchase the asset at the end of the lease.
D) operating lease because the lease is only for one-third of the estimated useful life.

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