Geisler Company leased a building from Ryan Company for 5 years.The first year of the lease was forgiven with payments beginning in the second year.No journal entry is required until the second year.

Question

Quizplus · Accepted Answer

Even though payments begin in the second year, the lease agreement creates a right-of-use asset and lease liability at the commencement date (the first year), requiring journal entries in the first year to reflect this obligation and asset.

Geisler Company Leased a Building from Ryan Company for 5