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From January 1, 2011, Lafayette Airport Flyer Inc. leases a van from Indianapolis Nissan for 4 years at $12,000 per year. The useful life of
From January 1, 2011, Lafayette Airport Flyer Inc. leases a van from Indianapolis Nissan for 4 years at $12,000 per year. The useful life of this van is 5 years, and the market value of this van on January 1, 2011 was $40,450. There is no bargain clause, and the van will be returned to Indianapolis Nissan at the end of the lease term. The market interest rate is 10%.
We don't have enough information to decide whether this is a capital lease or operating lease.
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This lease is a capital lease.
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This lease is an operating lease.
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