When a capital lease for equipment is signed, the lessee records a liability called
A)lease liability.
B)future value of capital lease payments.
C)equipment.
D)equipment leasehold.
E)present value of capital lease payments.

Question

Quizplus · Accepted Answer

When a capital lease for equipment is signed, the lessee records a liability called lease liability. This liability represents the obligation to make future payments for the use of the equipment over the term of the lease. The lessee will also record an asset, typically called leased equipment or similar, which represents the right to use the equipment during the lease term.

When a Capital Lease for Equipment Is Signed, the Lessee