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Kyle Manufacturing is considering a lease to acquire new equipment. The useful life of the asset is 15 years. Kyle can lease the equipment from
Kyle Manufacturing is considering a lease to acquire new equipment. The useful life of the asset is 15 years. Kyle can lease the equipment from Denver City Bank for $4000 per year over an 12 year period. The lease does not contain a purchase option. There is no transfer of ownership clause in the contract. Should Kyle account for this lease as an operating or a finance lease?
Begin by identifying any of the of the Group I criteria that Kyle meets.
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