Leases} Fort Smith Airlines has leased an aircraft from BAL Aircraft Company. The annual payments are ($
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Leases}
Fort Smith Airlines has leased an aircraft from BAL Aircraft Company. The annual payments are \(\$ 1,000,000\), and the life of the lease is 19 years. It is estimated that the useful life of the aircraft is 20 years. The present value of the future lease payments is \(\$ 8,755,630\).
\section*{Required:}
CONCEPTUAL CONNECTION Would Fort Smith Airlines record the lease as an operating or finance lease? Why?
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Related Book For 
Cornerstones Of Financial Accounting
ISBN: 9780176707125
2nd Canadian Edition
Authors: Jay Rich, Jefferson Jones, Maryanne Mowen, Don Hansen, Donald Jones, Ralph Tassone
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