Which of the following statements characterizes a sale-leaseback arrangement?
A) The lessee also is the seller.
B) The lessor treats the lease as an operating lease.
C) The lessee buys the asset from a third party.
D) The lessor's interest rate always is higher than in a finance lease.

Question

Quizplus · Accepted Answer

In a sale-leaseback arrangement, the lessee sells an asset to the lessor and then leases it back from the lessor. Therefore, the first statement, "The lessee also is the seller" is correct. The other statements are either incorrect or do not necessarily apply to all sale-leaseback arrangements.

Which of the Following Statements Characterizes a Sale-Leaseback Arrangement