Question
Fox Co. signed a7-yearlease at the beginning of 2020, leasing equipment owned by Owl Co. with an economic life of 9 years and a fair
Fox Co. signed a7-yearlease at the beginning of 2020, leasing equipment owned by Owl Co. with an economic life of 9 years and a fair value of$420,000.There is no purchase option and Fox must return the non-specialized equipment at the end of the lease. The present value of Fox's lease payments is $310,000.What is the proper classification ofOwl'slease?
Group of answer choices
Direct Financing
Capital
Finance
Sales-Type
Operating
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Intermediate Accounting Reporting and Analysis
Authors: James M. Wahlen, Jefferson P. Jones, Donald Pagach
2nd edition
9781305727557, 1285453824, 9781337116619, 130572755X, 978-1285453828
