If the lessor records deferred rent revenue at the beginning of a lease term, the lease must:
A) Be a financing lease.
B) Be a sales-type lease.
C) Contain a bargain renewal option.
D) Be an operating lease.

Question

Quizplus · Accepted Answer

Deferred rent revenue is typically recorded in an operating lease when the rent payments are not made evenly throughout the lease term. This accounting treatment allows for the recognition of rental income on a straight-line basis over the term of the lease, which is characteristic of operating leases.

If the Lessor Records Deferred Rent Revenue at the Beginning