If a company has an operating lease for an asset, which of the following entries for the lease payment is correct?
a) Dr. Lease obligation
Cr. Cash
b) Dr. Amortization expense
Cr. Cash
c) Dr. Rent expense
Dr. Amortization expense
Cr. Cash
d) Dr. Rent expense
Cr. Cash
A)Option A
B)Option B
C)Option C
D)Option D

Question

If a company has an operating lease for an asset, which of the following entries for the lease payment is correct? 
a) Dr. Lease obligation
Cr. Cash
b) Dr. Amortization expense
Cr. Cash
c) Dr. Rent expense
Dr. Amortization expense
Cr. Cash
d) Dr. Rent expense
Cr. Cash
A)Option A
B)Option B
C)Option C
D)Option D

Quizplus · Accepted Answer

For an operating lease, the lease payment is typically recognized as a rent expense. Therefore, the correct journal entry is to debit rent expense and credit cash.

If a Company Has an Operating Lease for an Asset