Question

Distinguish between the financial lease and operation lease

Answer 1

The lease is a finance agreement in which lessor (owner of the asset) purchases the asset and let the lessee (user of the asset) use the asset for a limited period against periodic payments, i.e. lease rentals. The terms and conditions of the lease are written in the lease deed. Finance or capital lease and operating lease are two types of lease. Finance Lease is a lease in which the risk and rewards are transferred to the lessee with the transfer of the asset. Unlike Operating Lease, in which the risks and rewards are not transferred to the lessee with the transfer of the asset.

Answer 2

Explanation:

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