Edna Corporation signed a lease for $600,000 for a truck. The truck has an estimated useful life of 5 years. This lease would be considered to be a capital lease if:
A) the lease agreement allows Edna to purchase the truck for $250,000 at the end of the lease.
B) title to the truck transfers to Edna at the end of the lease term.
C) the present value of the lease payments equals $25,000.
D) the truck is leased for two years.
Correct Answer:
Verified
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