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Why would this lease qualify as a finance lease

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Reference no: EM132891962

Problem - Owens Company leased equipment for 4 years at $50,000 a year with an option to renew the lease for 6 years at $2,000 per month or to purchase the equipment for $25,000 (a price considerably less than the expected fair value) after the initial lease term of 4 years. Why would this lease qualify as a finance lease?

Reference no: EM132891962

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