A purchase option lease provision gives the lessee the option to buy the leased property at the end of the lease term at a specified exercise price.
If a lease has a bargain purchase option, the lessee must record the asset as a capital lease in an amount equal to the present value of all minimal lease payments over the lease term. During the lease term, each minimum lease payment must be allocated between a discount of the lease obligation and interest expense.
The operating lease provides a tax deduction for rent payments. In a financial lease, there is an asset purchase option given at the end of the contractual period. Under an operating lease, there's no such offer.
A liability incurred to acquire a Tangible capital asset (TCA) with a useful life extending beyond an accounting period and held under lease by the government for use, on a continuing basis, in the production or supply of goods and services.
Learn more about liability here https://brainly.com/question/24534918
#SPJ4
