Which of the Following Would Indicate That the Lessee Should

Multiple Choice

Which of the following would indicate that the lessee should not classify a lease as a capital lease?

A) The fair value of the leased asset is $100,000 and the present value of the minimum lease payments is $95,000.
B) The lease provides for no unguaranteed salvage value.
C) The lessee has the option to purchase the leased asset in 4 years for $2 when the asset's salvage value is expected to be $20,000.
D) The asset's useful life is 20 years,a 4 year lease occurs when the asset is 26 years old.