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29 July, 10:31

Corr Inc. leases equipment from LM Leasing Corp. The lease requires rental payments of $20,000 per year for 5 years. Title of the property transfers at the end of the lease term. The equipment has a useful life of 10 years. How should the lease be classified by Corr?

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  1. 29 July, 10:44
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    Finance lease

    Explanation:

    Companies are specifically designed to lease equipment to other companies. The lease is known as a finance lease, and during the lease period, the finance company remains the legal owner of the company until the end of the lease period. After the end of the lease period, the rights are transferred to the other art by the finance company.
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Home » Business » Corr Inc. leases equipment from LM Leasing Corp. The lease requires rental payments of $20,000 per year for 5 years. Title of the property transfers at the end of the lease term. The equipment has a useful life of 10 years.
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