The journal entry for recording an operating lease payment would
A) be a memo entry only
B) debit the fixed asset and credit Cash
C) debit an expense and credit Cash
D) debit a liability and credit Cash

Question

Quizplus · Accepted Answer

Operating lease payments are considered operating expenses and should be recorded as a debit to the related expense account (e.g. lease expense) and a credit to Cash. Option A is incorrect because a memo entry does not provide sufficient detail for financial reporting purposes. Option B is incorrect because the fixed asset is not affected by an operating lease payment. Option D is incorrect because a liability is not typically created or impacted by an operating lease agreement, as it is not considered a financing arrangement.

The Journal Entry for Recording an Operating Lease Payment Would