A capital lease is considered as the acquisition of an asset with payments comprising both the interest and the principal repayment.

Name: A capital lease is considered as the acquisition of an asset with payments comprising both the interest and the principal repayment.
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A capital lease is treated as a purchase of an asset, where the lessee records the leased asset as if it has been purchased, and the lease payments are split into interest expense and principal repayment, similar to a loan.

A Capital Lease Is Considered as the Acquisition of an Asset