What entry is required for the lessor in a operating lease?
A)Gain/loss on asset sale.
B)Loan receivable.
C)Interest income.
D)Depreciation expense.

Question

Quizplus · Accepted Answer

In an operating lease, the lessor does not transfer ownership of the asset to the lessee. Therefore, the lessor continues to recognize the asset on its balance sheet and records depreciation expense over the asset's useful life.

What Entry Is Required for the Lessor in a Operating