Financing lease payments are expensed each period and therefore the lease is not reflected on the balance sheet.

Question

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Under the new accounting standard ASC 842, most leases (excluding short-term leases) are now required to be recognized on the balance sheet as both an asset and liability. This means that financing lease payments will not only be expensed each period but will also be reflected on the balance sheet as a liability for the lease obligation and an asset for the right to use the leased asset.

Financing Lease Payments Are Expensed Each Period and Therefore the Lease