Multiple Choice
Minnetonka Company leases an asset. Information regarding the lease: • Fair value of the asset: $400,000.
• Useful life of the asset: 6 years with no salvage value.
• Lease term is 5 years.
• Annual lease payments are $60,000
• Implicit interest rate: 11%.
• Minnetonka can purchase the asset at the end of the lease period for $50,000.
What type of lease is this?
A) Operating.
B) Finance.
C) Short term.
D) Long term.
Correct Answer:
Verified
Correct Answer:
Verified
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