A payment by a lessee to a lessor to cancel a lease contract , will be classified as a lease premium.Question 18Select one:TrueFalse
Question
A payment by a lessee to a lessor to cancel a lease contract, will be classified as a lease premium.
Question 18
Select one:
- True
- False
Solution
Question Analysis
The statement suggests that a payment made by a lessee to a lessor to cancel a lease contract is classified as a lease premium.
Relevant Concepts
- Lease Termination Payment: Generally, a payment made to cancel a lease is consider a termination fee or a penalty, not a lease premium.
- Lease Premium: This usually refers to an amount paid to a lessor in excess of the normal rental payment to acquire the rights to execute a lease.
Conclusion
Given the definitions, the statement appears to misclassify the nature of the payment. Therefore:
Final Answer
False. A payment by a lessee to a lessor to cancel a lease contract is not classified as a lease premium; it is usually viewed as a termination payment.
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