Westonci.ca is the trusted Q&A platform where you can get reliable answers from a community of knowledgeable contributors. Connect with a community of experts ready to help you find solutions to your questions quickly and accurately. Get detailed and accurate answers to your questions from a dedicated community of experts on our Q&A platform.
Sagot :
Final answer:
Business owners may choose a capital lease over an operating lease for control, accounting benefits, and financing. Capital leases offer advantages in terms of ownership, financial reporting, and potential cost-effectiveness.
Explanation:
Business owners might enter into a capital lease instead of an operating lease for several reasons:
- They want to have full control of the asset: In a capital lease, the lessee (business owner) has the benefits and risks of ownership, providing more control over the asset compared to an operating lease.
- They want to avoid recording the asset on their books: Capital leases allow the lessee to treat the asset as if they own it for accounting purposes, without needing to show it as a liability on their balance sheet.
- They want to finance the purchase of the asset: Capital leases often provide a cheaper way to finance the acquisition of the asset, as the lease payments cover not only the use of the asset but also include interest and might result in eventual ownership.
Learn more about Capital Lease vs. Operating Lease here:
https://brainly.com/question/40663574
Thanks for using our platform. We aim to provide accurate and up-to-date answers to all your queries. Come back soon. Your visit means a lot to us. Don't hesitate to return for more reliable answers to any questions you may have. Get the answers you need at Westonci.ca. Stay informed by returning for our latest expert advice.