In connection with a lease transaction, the lessor would not record:
A) an asset.
B) depreciation.
C) interest revenue.
D) a liability.

Question

Quizplus · Accepted Answer

The lessor, who is the owner of the asset, would not record a liability in connection with a lease transaction. Liabilities are recorded by the lessee if the lease is classified as a finance lease, as they have an obligation to make payments. The lessor, on the other hand, would record an asset (the leased item), depreciation on the asset (if it is a depreciable asset), and interest revenue (for finance leases).

In Connection with a Lease Transaction, the Lessor Would Not