Under both operating and finance leases, periodic rent expense for a lessee is likely to be the same over successive periods.

Question

Quizplus · Accepted Answer

Under a finance lease, the periodic expense typically consists of interest and amortization, which can result in a decreasing total expense over the lease term. In contrast, operating lease payments are usually fixed, resulting in a constant expense over successive periods.

Under Both Operating and Finance Leases, Periodic Rent Expense for a Lessee