A Lease Must Be Treated as a Direct Financing Lease

A lease must be treated as a direct financing lease by the lessor when

A) the lessor is a financial institution
B) the interest revenue element is determined in such a manner as to produce a constant rate of return on the net investment of the lease
C) at least one of the four basic criteria is met, collectibility of the minimum lease payments is reasonably assured, no uncertainties surround the amount of the unreimbursable costs, and the lessor does not have a dealer profit or loss
D) the lease agreement contains a provision for unguaranteed residual value

Correct Answer:

Verified

Unlock this answer now
Get Access to more Verified Answers free of charge

Access For Free