If a corporation signs a ten-year lease for a building and the present value of the lease payments is $250,000, the lease is a finance lease under ASC 842 if the:

Multiple Choice

• fair value of the building is $1,000,000.
• remaining useful life of the building is 20 years.
• lessor can purchase the building for $5,000 at the end of the lease when the fair value is estimated to be $25,000.
• building reverts back to the lessor at the end of the lease.