When a capital lease is first recorded at the inception of the lease,the lessee typically debits:
A)Leased asset.
B)Rent expense.
C)Lease expense.
D)Lease receivable.

Question

Quizplus · Accepted Answer

When a capital lease is first recorded at the inception of the lease, the lessee debits the leased asset account to reflect the acquisition of the asset. The lease liability is also recorded, typically as a credit to a lease payable or lease liability account. This reflects the obligation to make lease payments over the term of the lease.

When a Capital Lease Is First Recorded at the Inception