Question
Asked Aug 27, 2019
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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

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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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