Question

Which of the following conditions will NOT cause a lease to be categorized as a capital lease?
(A) It extends for at least 90 percent of the asset's life
(B) It transfers ownership to the lessee at the end of the lease term
(C) It seems likely that ownership will be transferred to the lessee at the end of the lease term because of a "bargain purchase" option
(D) The present value of the contractual lease payments equals or exceeds 90 percent of the fair market value of the asset at the time the lease is signed

Answer

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