Which of the following is not a criterion of a capital lease?
A) The lease transfers ownership of the property to the lessee by the end of the lease term.
B) The present value of the minimum lease payments equals or exceeds 90 percent of the fair value of the leased property, net of lessor's investment tax credit.
C) The lease contains an option to purchase the leased property at a bargain price.
D) The lease contains an option to renew.
E) The lease term is equal to or greater than 75 percent of the estimated economic life of the leased property.

Question

Quizplus · Accepted Answer

The option to renew is not a criterion for a capital lease. The other options are criteria that can classify a lease as a capital lease under accounting standards.

Which of the Following Is Not a Criterion of a Capital