Asked by Keneth Cheruiyot on May 12, 2024
Verified
The lease term includes the fixed non-cancellable term of the lease plus
A) any periods covered by an ordinary renewal option during which a guarantee by the lessee of the lessor's debt related to the leased property is expected to be in effect
B) any periods covered by a bargain renewal option
C) any periods for which failure to renew the lease imposes a significant penalty on the lessee
D) all of these
Lease Term
The period for which a lease agreement is effective, specifying the duration for which the lessee has the right to use the property.
Lessee's Debt
Refers to obligations or debts that a lessee must fulfill according to the lease agreement terms, often concerning leased assets.
Significant Penalty
A substantial fine or punishment imposed on individuals or entities for violating laws or regulations.
- Understand the implications of lease terms, including renewal options and penalties.
Verified Answer
GK
Gwendolyn KnightMay 17, 2024
Final Answer :
D
Explanation :
The lease term includes not only the fixed non-cancellable term of the lease, but also any periods covered by renewal options or when failure to renew results in a significant penalty. This means that all choices are correct, making option D the best choice.
Learning Objectives
- Understand the implications of lease terms, including renewal options and penalties.