Question

The present value of lease payments should be used by the lessee in determining the amount of a lease liability under a lease classified by the lessee as a(n) Finance Lease Operating Lease Finance Lease Yes Operating Lease Yes Finance Lease Yes Operating Lease No Finance Lease No Operating Lease No Finance Lease No Operating Lease Yes

Answer 1

Answer:

Finance Lease Yes Operating Lease Yes

Explanation:

The lease payments present value should be used for measuring the liability under a capital lease. In the case of the operating lease, the liability when occured at the time when the rent expense should be recorded but not be paid. In addition to this, it is recorded at the actual value of cash that should be paid not the present value

Therefore the first option is correct