On March 1, 2008, Sturdy Corp. became the lessee of new equipment under a noncan

Question

On March 1, 2008, Sturdy Corp. became the lessee of new equipment under a noncancelable six-yearlease. The total estimated economic life of this equipment is ten years. The fair value of this equipmenton March 1, 2008, was $100,000. The lease does not meet the criteria for classification as a capitallease with respect to transfer of ownership of the leased asset, or bargain purchase option, or leaseterm. Nevertheless, Sturdy must classify this lease as a capital lease if, at inception of the lease, thepresent value of the minimum lease payments (excluding executory costs) is equal to at leasta.$67,500.b.$75,000.c.$90,000.d.$100,000.

Explanation / Answer

On March 1, 2008, Sturdy Corp. became the lessee of new equipment under a noncan

Related Questions

Navigate

• Browse (All)
• Browse O
• Subjects

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.