Asked by Brooke Thompson on Jun 19, 2024
Verified
A capital lease requires the lessee to record the lease as a purchase of an asset.
Capital Lease
A lease agreement that is recorded as an asset on the lessee's balance sheet because it effectively transfers the risks and benefits of ownership from the lessor to the lessee.
Lease As Purchase
An agreement where the lessee has the option or obligation to purchase the leased asset at the end of the lease term.
- Acquire knowledge on the theory and financial handling of capital and operating leases.
Verified Answer
ST
SIDNEY TERRELLJun 24, 2024
Final Answer :
True
Explanation :
A capital lease is recorded as a purchase of an asset and the lessee is considered the owner of the leased asset for accounting purposes.
Learning Objectives
- Acquire knowledge on the theory and financial handling of capital and operating leases.
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