Which of the Following Is an Appropriate Journal Entry for the Initial

question 17

Multiple Choice

Which of the following is an appropriate journal entry for the initial recognition by a lessor of a finance lease arrangement?

• A) DR Lease receivable: CR Asset
• B) DR Lease receivable: CR Lease liability
• C) DR Leased asset: CR Cash/Accounts payable
• D) DR Leased asset: CR Cash

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Definitions:

Foreign Currency Transaction

A business deal or operation that involves the exchange of currencies from two different countries.

Australian Dollars

The official currency of Australia, symbolized as AUD.

Closing Rate

The exchange rate at the balance sheet date used to convert foreign currency denominated financial statements into the presentation currency.

Functional Currency

The currency of the primary economic environment in which an entity operates, typically used in its financial reporting.