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Henri Retail Stores is negotiating three leases for store locations. In all three leases, the interest rate is 12%. Each building will have an economic
Henri Retail Stores is negotiating three leases for store locations. In all three leases, the interest rate is 12%. Each building will have an economic useful life of 30 years. In all three leases, the buildings will revert back to the lessor at the end of each lease. The purchase price for each building is listed as an alternative to leasing. Determine whether each of the three leases should be classified by Henri (the lessee) as an operating lease or a capital lease. Show your calculations and reasons to support your answers
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