Question

Although only certain leases are currently accounted for as a sale or purchase, considering all leases to be sales or purchases can be justified theoretically. The principal reason that supports this idea is that______________.

A. all leases are generally for the economic life of the property, and the residual value of the property
B. at the end of the lease is minimal at the end of the lease, the property usually can be purchased by the lessee
C. a lease reflects the purchase or sale of a quantifiable right to the use of property
D. during the life of the lease, the lessee can effectively treat the property as if it were owned

Answer 1

A lease reflects the purchase or sale of a quantifiable right to the use of property

Step-by-step explanation:

Sale

This is commonly known as the transfer of title, deeds from seller to buyer for a price

Purchase

This is simply defined as the buying of title, deeds from seller for a fixed price.

Lease

This is the transfer of right to possession and use in return for some consideration.

It is als refered to as contractual agreement. This agreement is between a lessor and a Lessee. The lessor gives or conveys the right to use real or personal property or asset while the lessee is the one agrees to pay periodic rents over a time period.

The means of Lease payments include fixed payment, variable payments based on an index, bargain purchase option and guaranteed residual value.