Which of the following criteria would cause a lease to be recorded as an operating lease?
A)The lease transfers ownership of the property to the lessee.
B)The lease contains a bargain purchase option.
C)The lease term is less than 75% of the useful life of the leased property.
D)The present value of the lease payments equals or exceeds 90% of the fair market value of the leased property.

Question

Quizplus · Accepted Answer

An operating lease is recorded when none of the criteria for a finance lease are met, such as transfer of ownership, bargain purchase option, or lease term and payments meeting certain thresholds.

Which of the Following Criteria Would Cause a Lease to Be