A financial lease has many of the characteristics of a long-term debt obligation.

Question

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A financial lease is a long-term agreement where the lessee (borrower) agrees to make regular payments to the lessor (lender) in exchange for the use of an asset. This lease is usually for a fixed term and the lessee is responsible for maintenance and repairs. The payments made by the lessee are similar to the principal and interest payments made on a long-term debt obligation. Therefore, a financial lease does indeed have many of the characteristics of a long-term debt obligation.

A Financial Lease Has Many of the Characteristics of a Long-Term