On December 31, you’re one, the Killany co signs a lease contract to use a machi

Question

On December 31, you’re one, the Killany co signs a lease contract to use a machine that requires payment of $400,000 today and payment of 1.3 million in the future. The first payment is made. On a year and balance sheet, what liability does the company report? Assume the contract is properly classified as an operating lease On December 31, you’re one, the Killany co signs a lease contract to use a machine that requires payment of $400,000 today and payment of 1.3 million in the future. The first payment is made. On a year and balance sheet, what liability does the company report? Assume the contract is properly classified as an operating lease

Explanation / Answer

Operating lease is an agreement to use assets but it does not pass rights of asset as it is only made for use of asset.

An operating lease is not included in balance sheet same as with the liability are not recognized only which become due for payment are included in liability.

No future liability are recognized in the books.

Hence company will not record any liability in company report.

Please please upvote it at the end thank you so much

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