Some capital leases are treated as loans with income realized through implicit interest in each lease payment.

Question

Quizplus · Accepted Answer

This statement is true. Capital leases are treated as loans, and each lease payment includes an implicit interest component that generates income for the lessor. This income is recognized over the life of the lease and is typically reported as interest income on the lessor's income statement.

Some Capital Leases Are Treated as Loans with Income Realized