Question

Kevin has taken an apartment on lease for five years with a monthly rental of $3,500. At the end of five years, Kevin will be the legal owner of the apartment after an additional payment of $80,000. This type of lease is an example of a(n) _____ lease.

Answer 1

Answer:

The type of lease on which Kevin has taken apartment is Capital lease.

Explanation:

Capital lease is that type of lease agreement , where the lessor ( one who originally owns the apartment ) has agreed to transfer the ownership rights of his property ( apartment in this case ) to the lessee ( Kevin ) after the end of lease period. Here the lease period is of 5 years where Kevin would have to pay $3,500 every month and at the end of period he has to pay $80,000 as per agreement . Normally this type of agreements are of long term and non cancel able in terms of their nature.