An operating lease
A)Is also called a rent-to-own lease
B)Requires the lessee to record a leased asset and a lease liability
C)Allows the lessee to report rent expense
D)Is the economic equivalent of a purchase with a financing arrangement
E)None of these

Question

Quizplus · Accepted Answer

An operating lease allows the lessee to report rent expense, rather than recording a leased asset and lease liability, and it is not equivalent to a purchase with a financing arrangement. It is also not a rent-to-own lease, which is a different type of agreement.

An Operating Lease