When a lessee makes periodic cash payments for a capital lease, which of the following accounts is decreased?

Question

Quizplus · Accepted Answer

When a lessee makes periodic cash payments for a capital lease, the Capital Lease Obligation account is decreased as the lessee is paying off the debt owed for the leased equipment. The Lease Rental Expense account would be increased as the lessee incurs expenses for using the equipment, while the Leased Equipment account would remain unchanged as it represents the value of the equipment being used. Interest Expense would also be decreased over time as the lease liability is paid down.

When a Lessee Makes Periodic Cash Payments for a Capital