Q 21A.1:

Which of the following is an essential element of a lease agreement?

A :

The property that is the subject of the lease agreement must be held for sale by the lessor prior to the drafting of the lease agreement.

B :

The lessor allows the lessee to use the leased property.

C :

The term of the lease is substantially equal to the economic life of the leased property.

D :

The lessee provides a sinking fund equal to one years lease payments.