What are the three types of expenses that a lessee experiences with a finance lease?
A) Lease expense, payments for nonlease components, interest expense.
B) Amortization expense, lease expense, interest expense.
C) Payments for nonlease components, lease expense, amortization expense.
D) Amortization expense, interest expense, payments for nonlease components.

Question

Quizplus · Accepted Answer

A finance lease typically involves amortization expense (for the asset being leased), interest expense (on the lease liability), and payments for nonlease components (such as maintenance or insurance that are not included in the lease payment itself).

What Are the Three Types of Expenses That a Lessee