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a_sh-v [17]
3 years ago
7

If a finance lease contains a bargain purchase option, the lessee should amortize the leased asset: Multiple Choice Over the ter

m of the lease. Without reference to the economic life of the asset. Over the economic life of the asset. Without reference to the term of the lease.
Business
1 answer:
Finger [1]3 years ago
3 0

Answer:

Over the economic life of the asset.

Explanation:

An asset obtained under a financial lease must be depreciated in the same way as the company would depreciate any other similar fixed asset. E.g. a leased truck should be depreciated similarly to other trucks owned by the company.

In a financial lease, the lessor amortizes the asset's value, while the lessee depreciates the assets as common fixed assets (a lessee doesn't amortize).

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