All of the Following Statements Regarding Leases Are True Except

Multiple Choice

All of the following statements regarding leases are true except:

A) For a capital lease the lessee records the leased item as its own asset.
B) For an operating lease the lessee reports the lease payments as rental expense.
C) For a capital lease the lessee depreciates the asset acquired under the lease, but for an operating lease the lessee does not.
D) Capital leases create a long-term liability on the balance sheet, but operating leases do not.
E) Capital leases do not transfer ownership of the asset under the lease, but operating leases often do.