Which of the following apply to the lessee of a sale and leaseback arrangement?
I.may have option to purchase asset at end of lease term
II.receives cash from the sale of the asset
III.maintains ownership rights
IV.uses the asset
A)I and IV only
B)II and III only
C)I, II, and IV only
D)II, III, and IV only
E)I, II, III, and IV

Question

Quizplus · Accepted Answer

In a sale and leaseback arrangement, the lessee (original owner) sells the asset and then leases it back. This means they receive cash from the sale (II), may have the option to purchase the asset at the end of the lease term (I), and continue to use the asset (IV). However, they do not maintain ownership rights during the lease term (III), as ownership is transferred to the buyer.

Which of the Following Apply to the Lessee of a Sale