Which of the following characteristics would cause a lease to be declared a capital lease for accounting purposes?

Multiple Choice

• The lease does not transfer ownership of the property to the lessee by the end of the lease term.

• The lessee can purchase the asset at a price below fair market value when the lease expires.

• The lease term is at least 50% of the estimated economic life of the asset.

• The lessor maintains the insurance and maintenance on the leased asset.

• The present value of the lease payments equals 60% of the fair market value at the start of the lease.