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

Question

Quizplus · Accepted Answer

An operating lease allows the lessee to report rent expense rather than recording a leased asset and lease liability. None of the other answer choices accurately describe an operating lease.

An Operating Lease