Question

The FASB defines financial lease as leases that meet which of the following conditions: HINT: There...

The FASB defines financial lease as leases that meet which of the following conditions: HINT: There is more than one correct answer listed - select all you believe to be correct.

Group of answer choices

The lease agreement transfers ownership to the lessee before the lease expires

The lessee can purchase the asset for a bargain price when the lease expires

The lease lasts for at least 75% of the asset's estimated economic lifeThe present value of the lease payments is at least 90% of the asset's value

The present value of the lease payments is at least 90% of the asset's value

The lessee can purchase the asset at fair market value when the lease expires
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Answer #1

The lease agreement transfers ownership to the lessee before the lease expires

The lessee can purchase the asset for a bargain price when the lease expires

The lease lasts for at least 75% of the asset's estimated economic life

The present value of the lease payments is at least 90% of the asset's value

the above 4 are correct

The lessee can purchase the asset at fair market value when the lease expires is incorrect because lessee can buy asset at less than fair value

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