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

question 7

Multiple Choice

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

• A) DR Leased asset: CR Lease liability
• B) DR Lease rental expense: CR Cash/accounts payable
• C) DR Leased asset: CR Cash/accounts payable
• D) DR Lease asset: CR Lease interest expense

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Definitions:

Estimable

Capable of being estimated or approximated in magnitude or extent.

Remote

Refers to working from a location outside of the traditional office environment, often implying work done from home or another location through the internet.

Contingent Liability

A possible financial duty that could emerge in the future, contingent on the result of a certain event.

Probable

A term used in accounting and finance to describe events or outcomes that are likely to happen or transactions that are likely to occur.