The financial statements of La-Z-Boy Chair Company contain the following footnote: The Company has several long-term leases
Question:
The financial statements of La-Z-Boy Chair Company contain the following footnote:
The Company has several long-term leases covering manufacturing facilities. The lease agreements require the Company to insure and maintain the facilities and provide for annual payments, which include interest. These leases give the Company the option to purchase the facilities for nominal amounts, or in some instances to renew the leases for extended periods at nominal annual rentals.
Would these leases be classified as operating or capital leases? Discuss.
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Based on the information provided in the footnote it seems that the leases held by LaZBoy Chair Comp...View the full answer
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