Which of the following is an appropriate journal entry for the initial recognition by a lessor of a finance lease arrangement?
A) DR Lease receivable: CR Asset
B) DR Lease receivable: CR Lease liability
C) DR Leased asset: CR Cash/Accounts payable
D) DR Leased asset: CR Cash

Question

Quizplus · Accepted Answer

In a finance lease, the lessor recognizes a lease receivable and derecognizes the asset being leased, reflecting the transfer of risks and rewards of ownership to the lessee.

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