A direct lease is a lease under which the lessee sells an asset for cash to a prospective lessor and then leases back the same asset, making fixed periodic payments for its use.

Question

Quizplus · Accepted Answer

A direct lease does not involve the sale of an asset by the lessee to the lessor. Instead, it is a straightforward lease agreement where the lessor purchases the asset and leases it to the lessee. The scenario described is a sale and leaseback transaction.

A Direct Lease Is a Lease Under Which the Lessee