Use the present value and future value tables included in Appendix 8 and on the textbook companion website.
- A long-term, noncancelable lease for a period that is equal to the life of the leased asset is accounted for as a(n)

Question

Use the present value and future value tables included in Appendix 8 and on the textbook companion website. 
- A long-term, noncancelable lease for a period that is equal to the life of the leased asset is accounted for as a(n)

Quizplus · Accepted Answer

A lease that is non-cancelable and covers the entire life of the leased asset is typically classified as a capital lease, which is accounted for as a purchase of the leased asset. This is because the lessee effectively assumes the risks and rewards of ownership over the asset for the lease term. Operating leases, on the other hand, do not transfer the risks and rewards of ownership, and are therefore accounted for as a simple rental agreement.

Use the Present Value and Future Value Tables Included in Appendix