Under a capital lease,the lessee records both an asset and a liability.

Question

Quizplus · Accepted Answer

This is true because under a capital lease, the lessee (the person or company leasing the asset) is treated as the owner of the asset and must record it on their balance sheet as an asset. However, because they are essentially borrowing the asset over a period of time, they must also record a liability for the lease payments they will owe over the lease term.

Under a Capital Lease,the Lessee Records Both an Asset and a Liability