An entity incurs periodic expenses over the life of a finance lease. Which of the following expense(s) are normally incurred?

Name: An entity incurs periodic expenses over the life of a finance lease. Which of the following expense(s) are normally incurred?
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Question

Quizplus · Accepted Answer

In a finance lease, the lessee recognizes depreciation expense for the asset and finance costs for the interest on the lease liability. Lease (rent) expense is typically associated with operating leases, not finance leases.

An Entity Incurs Periodic Expenses Over the Life of a Finance