Under the provisions of AS-19 'Leases', a leased asset is shown in the balance sheet of:

Manufacturer

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Lessor

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Lessee

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Financing bank

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Solution

The correct option is C Lessee
The liability component is reported in the liabilities section of the balance sheet as a "capital lease" line item. The amount is equal to the discounted present value of the lease payments over the lease term plus any interest accrued between the previous lease payment and the balance sheet date.

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In lease financing, the owner of the assets is called the __________ while the party that uses the assets is known as the ______________.

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