Question
ABC Inc. leased a drilling equipment form a regional oil services company. The oil company purchased the drilling equipment from an international drilling equipment manufacturer
ABC Inc. leased a drilling equipment form a regional oil services company. The oil company purchased the drilling equipment from an international drilling equipment manufacturer at a cost of700,000 SR. The following information is given:
Which Condition met?
Given these information
Lease term : 3 years
Payment frequency: semiannual (at the end of the periods)
Economic life of the asset Three years
Payment amount: 120,000 SR
Rate (lessors and the lowest rate) 12%
Ownership transfers
A bargain purchase option
The noncancelable lease term is equal to 75% or more of the expected economic life of the asset,
The PV of the minimum lease payments is 90% or more of the fair value of the asset
Operating
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