When leased property is recognized as an asset and a related liability is recorded,the lease is a(n):

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When leased property is recognized as an asset and a related liability is recorded, it is known as a capital lease. In a capital lease, the lessee essentially assumes the risks and rewards of ownership, and as a result, the leased asset is recognized on the lessee's balance sheet as a non-current asset, with a corresponding liability for the lease payments. Legal, certified, and operating leases do not involve recognition of a related liability on the lessee's balance sheet.

When Leased Property Is Recognized as an Asset and a Related