A company recognizes a lease as a capital lease when

a. the lease transfers title of the leased asset to the lessee at the end of the lease term.

b. the present value of the lease payments is less than 90% of the market value of the leased asset.

c. the lease term is less than 75% of the estimated useful life of the leased asset.

d. the lease has no option to purchase the asset at the end of the lease term.

AppendixLO1