The Rental Payments Made During the Term of a Finance

The rental payments made during the term of a finance lease:

A) are reductions of the lease liability that should be debited to the liability account.
B) are an expense that should be recognised in the annual statements of comprehensive income.
C) need to be divided into an interest component and an expense component. The expense effectively shows the amortisation of the lease asset.
D) should be considered as a payment of principal (reduction in the lease liability) and interest (an annual expense) .