Which of the following is an appropriate journal entry for the initial recognition by a lessee of a finance lease arrangement?
A) DR Leased asset CR Bank loan;
B) DR Cash CR Leased asset;
C) DR Lease liability CR Leased asset;
D) DR Leased asset CR Lease liability.

Question

Quizplus · Accepted Answer

The correct journal entry for the initial recognition of a finance lease by a lessee involves debiting the leased asset and crediting the lease liability. This reflects the lessee's right to use the asset and the obligation to make lease payments.

Which of the Following Is an Appropriate Journal Entry for the Initial