Which of the following is an appropriate journal entry for the initial recognition by a manufacturer/dealer lessor?
A) DR Leased asset: CR Cash
B) DR Cash: CR Sales revenue
C) DR Lease liability: CR Leased asset
D) DR Leased receivable: CR Sales revenue

Question

Quizplus · Accepted Answer

The correct journal entry for the initial recognition by a manufacturer/dealer lessor is to debit (DR) leased receivable and credit (CR) sales revenue. This entry reflects the recognition of the sales type lease, where the leased asset is effectively sold to the lessee, and the lessor recognizes sales revenue and a receivable representing the lessee's obligation to make lease payments.

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