15 Jan Doherty Company leased equipment from Lambert Comp
Doherty Company leased equipment from Lambert Company. The classification of the lease makes a difference in the amounts reflected on the balance sheet and income statement of both Doherty and Lambert.A) What criteria must be met by the lease so that Doherty Company can classify it as a capital lease?B) What criteria must be met by the lease so that Lambert Company can classify it as a sales-type or direct financing lease?C) Contrast a sales-type lease with a direct financing lease.
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