Wayne Technical Corporation Signed a Lease for $150,000 for Equipment

Multiple Choice

Wayne Technical Corporation signed a lease for $150,000 for equipment. The equipment has an estimated useful life of 7 years. This lease would be considered to be a capital lease if:

A) the equipment is leased for 4 years.
B) the present value of the lease payments equals $40,000.
C) title to the equipment transfers to Wayne at the end of the lease term.
D) the lease agreement allows Wayne to purchase the truck for $75,000 at the end of the lease.