Costs incurred by the lessor that are associated directly with originating a lease and are essential to acquire that lease are called initial direct costs.Initial direct costs are recorded as assets and amortized over the term of the lease in:
A)An operating lease.
B)A capital lease.
C)A direct financing lease.
D)A sales-type lease.

Question

Quizplus · Accepted Answer

In an operating lease, initial direct costs are recorded as assets and amortized over the lease term.

Costs Incurred by the Lessor That Are Associated Directly with Originating