Use the following graph to answer the following questions.
-Lines Y1 and Y2 represent
Definitions:
Lessees' Balance Sheet
The financial statement that reflects the rights and obligations arising from leasing agreements, including both right-of-use assets and lease liabilities, from the perspective of the lessee.
Capital Leases
A lease that transfers substantially all risks and rewards of ownership of the asset to the lessee, effectively treated as a purchase.
Operating Leases
Leases where the lessor retains ownership of the asset, and the asset is returned after the lease term; typically involves equipment and property.
Direct Financing Capital Lease
A type of lease in which the lessor finances the leased asset, and all risks and rewards of ownership are transferred to the lessee, without actual transfer of ownership.
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