What entry is required for the lessor in a finance lease?
A)Loan receivable.
B)Rental income.
C)Interest expense.
D)Depreciation expense.

Question

Quizplus · Accepted Answer

In a finance lease, the lessor recognizes a loan receivable, representing the right to receive lease payments from the lessee. This is because the lessor effectively finances the asset for the lessee, and the lease payments are considered repayments of this financing.

What Entry Is Required for the Lessor in a Finance