Lessee Leased Some Land and Buildings from Lessor

Lessee leased some land and buildings from Lessor. There was no transfer of ownership and no bargain purchase option. If the fair value of the land is less than a certain percentage of the total fair value of the leased property at the inception of the lease, both the lessee and the lessor may consider the land and buildings as a single unit. What is that percentage?

A) 10%
B) 75%
C) 25%
D) 50%

Correct Answer:

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