Which of the following is/are not one of the conditions of a capital lease?
A)transfer of ownership to the lessor at the end of the lease term
B)transfer of ownership to the lessee appears likely because of a "bargain" purchase option
C)lease extends for at least 75 percent of the asset's life
D)present value of the minimum contractual lease payments equals or exceeds 90 percent of the fair market value of the asset at the time the lessee signs the lease
E)all of the above

Question

Quizplus · Accepted Answer

A capital lease typically involves conditions that lead to the lessee essentially owning the asset or having a significant portion of the benefits and risks of ownership. The incorrect statement, A, says the ownership transfers to the lessor at the end of the lease term, which is not a condition of a capital lease. In a capital lease, the ownership may transfer to the lessee, not the lessor.

Which of the Following Is/are Not One of the Conditions