Equal monthly rental payments for a particular lease should be charged to rental expense by the lessee for which of the following? Capital lease Operating lease
A) Yes No
B) Yes Yes
C) No No
D) No Yes

Question

Quizplus · Accepted Answer

In an operating lease, rental payments are expensed as incurred, so equal monthly payments are charged to rental expense. In a capital lease, the asset and liability are recorded on the balance sheet, and the expense is recognized through depreciation and interest, not as rental expense.

Equal Monthly Rental Payments for a Particular Lease Should Be