Question

______________ lease transfers

substantially all the risks and rewards

incidental to ownership of an asset​

Answer 1

Answer:

Finance lease is a lease agreement in which substantially all the risks and rewards incidental to ownership of an asset are transferred to the lessee from the lessor.

Answer 2

The lease is financial lease.

• It is a lease that allows an entity to borrow an asset for a lengthy period of time, with the lease term virtually equaling the asset's life.
• Generally the company capitalises the assets in its books.
• It gives the lessee the option of purchasing the specific asset at a cheaper price than the market value at the conclusion of the lease period.
• It transfers almost all of the risks and rewards that come with owning an asset.