BU393 Study Guide - Quiz Guide: Finance Lease, Tax Rate, Leaseback
Document Summary
Lease a contractual agreement establishing that the lessee has the right to use the asset and in return must make period payments to the lessor, the owner of the asset. Lessor individual who owns the property and rents it out. Service lease usually a short term cancelable lease. Capital lease also called a direct financing" or financial" lease financing arrangement for lessee to buy equipment. Sale and leaseback owner of asset sells asset to another party and then leases it back ex. The lease transfers ownership of the property to the lessee by the end of the term of the. The lessee has the option to purchase the asset at a price below fair market value when asset matures. The lease term is at least 75% of the estimated economic life of the asset. The present value of the lease payments is at least 90% of the asset"s fair market value.
