Which of the following statements characterizes an operating lease?
A) The lessee records depreciation and interest.
B) The lessee records the lease obligation related to the leased asset.
C) The lessor records depreciation and lease revenue.
D) The lessor transfers title of the leased property to the lessee for the duration of the lease term.

Question

Quizplus · Accepted Answer

In an operating lease, the lessor retains ownership of the leased asset and records depreciation and lease revenue, while the lessee records lease payments as rent expense. The lessee does not record depreciation or interest, nor does the lessor transfer title of the property to the lessee.

Which of the Following Statements Characterizes an Operating Lease