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

Question

Quizplus · Accepted Answer

An operating lease allows the lessee to report rent expense, as it is treated as a rental agreement rather than a purchase or financing arrangement.

An Operating Lease