Kate is leasing some equipment from Ajax Leasing for a period of one year. Ajax pays the maintenance, taxes, and insurance costs for this equipment. The life of the equipment is seven years. Which type of lease does Kate have?

Question

Quizplus · Accepted Answer

Kate has an operating lease as Ajax Leasing owns the equipment and is responsible for maintenance, taxes, and insurance costs. This type of lease is commonly used for short-term leases and allows the lessee to use the equipment without taking on the risks associated with ownership.

Kate Is Leasing Some Equipment from Ajax Leasing for a Period