Asked Aug 27, 2019

Accounting for operating capital lease. What are the issues that the accountant faces in recording such transactions and how they should be recorded on the financial stgatements of the company


Expert Answer

Step 1

Operating lease gets different accounting treatment both for the lessor and the lessee. They are as follows:


In the books of lessee:


  • The lessee does not own the asset.


  • Lease payments are treated as operational expenses for the lessee.


  • The lease asset ...

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