Which one of the following statements is correct concerning an operating lease?

Multiple Choice

• The leased asset will have a significant residual value at the end of the lease term.

• The lease will be recorded as a capital lease on the balance sheet of the lessee.

• The lessor can terminate the lease at any time without penalty.

• The lease term is generally equal to the economic life of the leased asset.

• The lessee is responsible for the maintenance and insurance related to the leased asset.