A long-term leased asset would appear on the balance sheet as

Question

Quizplus · Accepted Answer

When a company enters into a lease agreement for an asset and the lease is classified as a finance (or capital) lease, it is required to recognize both an asset and a liability on the balance sheet. The asset is recorded as a right-of-use asset, and the liability is recorded as a lease liability. The lease liability is split into two parts: the current portion (payments due within one year) and the non-current or long-term portion (payments due in more than one year).
The long-term portion of the lease liability reflects the present value of lease payments that are due beyond the next 12 months. This long-term lease liability is shown under the long-term liabilities section of the balance sheet. The right-of-use asset, which represents the lessee's right to use the leased asset over the lease term, is shown under non-current assets on the balance sheet.
Therefore, the correct answer is b. long-term lease liability, as it represents the obligation to make lease payments in the future beyond the current fiscal year.

A Long-Term Leased Asset Would Appear on the Balance Sheet