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Which of the Following Leases Is Classified as an Operating

Question 16

Multiple Choice

Which of the following leases is classified as an operating lease?


A) A 1 year apartment lease. The apartment has a life expectancy of 30 years.
B) A 6 year lease of a computer system. The computer system is expected to last 8 years.
C) A 5 year copier lease in which the title will transfer to the lessee at the end of the 5 year period
D) A 5 year car lease in which the lessee can buy the vehicle very inexpensively at the end of the 5 years.
E) A 10 year lease of a crane, which costs $1,000,000. The present value of the lease payments are $1,100,000.

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