With a leveraged lease,the lessor must treat the lease as a direct financing lease.

Question

Quizplus · Accepted Answer

In a leveraged lease, the lessor provides a portion of the financing for the acquisition of leased assets, and the lessee obtains additional financing from a third-party lender. Under accounting rules, the lessor must treat the lease as a direct financing lease, meaning that the leased assets are recorded as if they were sold to the lessee, and the lease payments are treated as loan repayments by the lessee. This allows the lessor to recognize interest income over the lease term and defer the recognition of profit on the sale of the leased assets.

With a Leveraged Lease,the Lessor Must Treat the Lease as a Direct