If the lessee makes the following entry: $\begin{array} { l }
\text {Dr. Amortization expense (SE) }&xx\ \text { Cr. Accumulated amortization (XA) }&&xx\
\end{array}$

What type of lease do they have?
A)Commercial lease
B)Finance lease
C)Operating lease
D)Sales-type lease

Question

If the lessee makes the following entry: $\begin{array} { l  }
 \text {Dr. Amortization expense (SE) }&xx\ \text { Cr. Accumulated amortization (XA) }&&xx\
\end{array}$

What type of lease do they have?
A)Commercial lease
B)Finance lease
C)Operating lease
D)Sales-type lease

Quizplus · Accepted Answer

This entry is characteristic of a finance lease, where the lessee recognizes amortization expense over the lease term, reflecting the consumption of the leased asset's economic benefits.