A lease with high payments early in its life which then decline to termination would:
A)provide greater cash flow to the lessee in the beginning years.
B)be evidence of tax avoidance and not acceptable to the IRS.
C)be qualified as a capital lease under FASB 13.
D)provide a lower residual value and thus ensure a bargain-purchase price option.
E)All of the above.

Question

Quizplus · Accepted Answer

A lease with high payments early in its life may be seen as an attempt to front-load expenses for tax purposes, which could be considered tax avoidance by the IRS.

A Lease with High Payments Early in Its Life Which