(Charlottetown, PE, Canada)
We have agreed to rent a piece of equipment with a purchase option, available for us to exercise anytime we see fit. The amount of the purchase option is equal to the original purchase price $48,000 less the amount of rent paid on the equipment.
After 16 months of renting, we decided to purchase the equipment.
How does the accounting for this work? Do I handle this the same way you handle a capital lease?
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