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Wayne technical corporation signed a lease for equipment which requires lease payments of $50,000 per year...

Wayne technical corporation signed a lease for equipment which requires lease payments of $50,000 per year for four years. The equipment has estimated useful life for 7 years.This lease will be a capital lease if:
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A capital lease is a lease in which lessor agrees to transfer the assets with all rights to the lesse after the lease period is over. capital lease are generally long tern in nature and Net present value of all Lease payments is almost equals to the value of asset.

So if all the above conditions are satisfied this lease can be called as Capital Lease.

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