Which of the following facts would require a lessee to classify a lease as a capital lease?

Select one:

a. There are no important uncertainties about the amounts of unreimbursable costs.

b. The present value of the minimum lease payments is 85% of the fair market value of the leased property to the lessor, less any investment tax credit accruing to the lessor.

c. The lease contains a purchase option.

d. The lease term is 85% of the estimated economic life of the leased property.

Which of the following correctly states a lease capitalization criterion from the point of view of the lessee?

Select one:

a. Collectability of the lease payments is reasonably certain.

b. The present value of the minimum lease payments is equal to 75% or more of the fair value of the leased property.

c. The lease term is equal to at least 85% of the estimated economic life of the leased asset.

d. The lease contains a bargain purchase option.

Which of the following combinations of payments would cause a lease to be classified as a capital lease?

Select one:

a. minimum periodic rental payments plus executory costs.

b. minimum periodic rental payments plus the payment required for a bargain purchase option.

c. minimum periodic rental payments minus any payment required for a guarantee of the residual value.

d. minimum periodic rental payments minus any payments required for failure to renew or extend the lease.