easy · Financial Accounting accounting-cycle-financial-statements

Under ASC 842, how does a lessee recognize the total lease expense for an 'Operating Lease' over the lease term?

1. By reporting separate interest and amortization components, leading to a front-loaded expense.
2. As a reduction of the Right-of-Use asset only, with no income statement impact.
3. On a straight-line basis as a single operating expense.
4. Only when cash payments are made, following cash-basis accounting.

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