Which of the following leases would least likely be classified as an operating lease by the lessee?

Which of the following leases would least likely be classified as an operating lease by the lessee?




A) The lease term is 5 years and the economic life of the leased asset is 8 years.
B) Ownership of the leased asset reverts to the lessor at the end of the lease term.
C) The agreement permits the lessee to buy the leased asset for one dollar at the end of the lease term.
D) The fair value of the leased asset is $20 million and the present value of the lease payments is $13 million.







Answer: C


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Accounting Chapter 15

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