How to Account for a Finance Lease (Lessee's Perspective)

This video shows how the lessee would account for a lease classified as a finance lease under the new lease accounting rule. The lessee would initially recognize a right-of-use asset and a liability for the lease payments. The right-of-use asset is amortized over time, while the lease liability is reduced when lease payments are made and increased as interest effectively accrues on the lease liability.—
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