Ch. 15 Test Questlon 5 (of 5· 10.00 points MC Qu. 24 LO 15-03 On February 1, 201

Question

Ch. 15 Test Questlon 5 (of 5· 10.00 points MC Qu. 24 LO 15-03 On February 1, 2016, Pearson Corporation became the lessee of... on February 1,2016, Pearson Corporation became the lessee of equipment under a five-year, noncancelabie ease. The estimated economic Ife of the equipment is eight years. The fair value of the equipment was $620,000. The lease does not meet the definition of a capital lease in terms of a bargain purchase option transfer of trie, or the lease term. However Pearson must classity this as a capital lease if the present valuve of the mininum lease payments is at least O $$58.000 O $496,000 O $554.015 $620,000 Multiple Choice Mc Qu 24 L0 15-03 on February T 2016. Pearson bocime the lesose of TOSHIBA 2 4 6 9 8

Explanation / Answer

Pearson Corporation will have to classify the lease as capital lease if the PV of the lease payments is equal to 90% or more of the fair value of lease.

=$620000*90%=$558000

Correct option is the first one.

Related Questions

Navigate

• Browse (All)
• Browse C
• Subjects

---