Leasing is a very lucrative source of financing for certain companies' needs, including corporations and small$-$ to medium$-$sized businesses. This is

because the Internal Revenue Service $($IRS$)$ allows the lessee to deduct the lease payments and the lessor can deduct interest payments on any debt

used to finance the asset leased.

To be able to deduct lease payments, IRS guidelines must be followed. An agreement that meets all IRS requirements to qualify as a genuine lease is

called

Diana is a lawyer at Leaseonic Corp. She is evaluating the company's current lease agreements. Diana recently hired an intern, Michael, and assigned

him the task of listing the provisions for tax guidelines related to lease contracts. Diana needs to check and find mistakes in the provisions that

Michael listed.

Of the following points outlined in Michael's document, which are correct? Check all that apply.

The equipment's residual value at the expiration of the lease should be at least one fifth of its value at the start of the lease.

The leased equipment should not be a "limited use" property, which means that the equipment should be available for use by anyone at

the end of the lease.

The lease agreement can restrict the use of the equipment so that only its lessee or a related party can use the asset after the expiration

of the term.

Equipment with a $20-$year life cannot be leased for more than $16$ years.

The lessee or any other party has the right to purchase the equipment at the expiration at a predetermined fixed price specified in the

lease contract.

If a lease purchase option conveys an improvident bargain upon the lessee, the lessee may be subject to

upon the sale of the

asset.