Treatment of a capital lease versus an operating lease


Question: Distinguish between the accounting treatment of a capital lease versus an operating lease for a lessee both at the inception of the lease and during the first year of the lease (for the capital lease assume a transfer of ownership at the end of the first year of the lease).  Also, consider whether there is a change in accounting if terms of the operating lease require that rental payments not be made on a straight line basis. Use a hypothetical situation if necessary.

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Finance Basics: Treatment of a capital lease versus an operating lease
Reference No:- TGS01821472

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