Question & Answer: On February 1, 2016, Zales Corporation became the lessee of equipment under a five-year, noncancetable e. The estimated economic life of the equ…..

On February 1, 2016, Zales Corporation became the lessee of equipment under a five-year, noncancetable e. The estimated economic life of the equipment is elght years. The fair value of the equipment was $720,000. The lease does transfer of ttie, or the lease term. Howev the minimum lease payments is at least not meet the definition of a capital lease in terms of a bargain purchase option er Zales must classify this as a capital lease if the present value of o $648,000 O $720.000 O $646,515 O $576.000.