Senario 1

ABC Inc. leased a drilling equipment form a regional oil services company. The oil company purchased the drilling equipment from an international drilling equipment manufacturer at a cost of 590,078 SR. The following information is given:

Lease term :	3 years
Payment frequency:	semiannual (at the end of the periods)
Economic life of the asset	Three years
Payment amount:	120,000 SR
Rate (lessors and the lowest rate)	12%

Requirements:

1. Which Condition is met?

		Ownership transfer
		Bargin Purchase option
		the Lease term is more than 90% of usefull life
		The minimum lease payment is more than 90% of the fair value
		Two conditions met