I Like Accounting

Journal Entries for a Lessee's Lease Payments Diagram

Diagram:

Journal Entries for a Lessee

Notes:

Under a finance lease, total expenses will be higher in early years and lower in later years.

Under an operating lease, total expenses will be the same each year.

There is a diagram showing how to build an effective interest table.

There is also a diagram showing how to determine whether a lease is a finance lease or an operating lease.

🔙 Back to diagram list