A lease in which at the end of the lease period the asset becomes the property of the lessee,possibly with an additional payment is called a(n)_____ lease.
A) capital
B) leveraged
C) direct
D) operating

Question

Quizplus · Accepted Answer

A capital lease, also known as a finance lease, allows the lessee to acquire ownership of the asset at the end of the lease term. Typically, the lessee makes a series of payments to the lessor that include both interest and principal over the lease term. At the end of the lease term, the lessee may have the option to purchase the asset for an additional payment, which is usually at a nominal amount. Therefore, a capital lease allows the lessee to own the asset at the end of the lease term, making it a good choice for businesses that want to acquire and use the asset for the long term.

A Lease in Which at the End of the Lease