Multiple Choice
(CMA adapted, Dec 92 #10) There are many similarities between lessee and lessor accounting for the capitalization of leases.Which one of the following is a criterion for the capitalization of a lease by a lessee?
A) The lease transfers ownership of the property to the lessee by the end of the lease term.
B) The lease term is at least 90% of the remaining life of the asset at the beginning of the lease.
C) The present value of the minimum lease payments is 75% or more of the fair market value of the leased asset.
D) Future costs are reasonably predictable.
E) The lease term is at least 60% of the remaining life of the asset at the beginning of the lease.
Correct Answer:
Verified
Correct Answer:
Verified
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