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What will be the journal entry for financial lease. Thanks
Finance Lease is expressed as an agreement wherein the lessor receives lease payments for the covering of ownership costs. Moreover, the lessor holds the responsibility of maintenance, taxes, and insurance.
A capital lease is a lease in which the lessor only finances the leased asset, and all other rights of ownership transfer to the lessee.
Assets A/C Dr
Lease Liability Cr
At the time of first annual payment
Lease Liability A/C Dr
Interest Expense A/C Dr
Bank A/C Cr
