Estimated fair value of the property

Reference no: EM131788369

Question: The Deluxe Corporation has just signed a 120-month lease on an asset with a 15-year life. The minimum lease payments are $2,000 per month ($24,000 per year) and are to be discounted back to the present at a 7 percent annual discount rate. The estimated fair value of the property is $175,000. Should the lease be recorded as a capital lease or an operating lease?

Reference no: EM131788369

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