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If the lessor records deferred rent revenue at the beginning of a lease term, the lease...

If the lessor records deferred rent revenue at the beginning of a lease term, the lease must:

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Answer: Be an operating lease

If the lessor records deferred rent revenue at the beginning of a lease term, the lease must be an operating lease. Because operating lease represents an off balance sheet financing of assets, where a leased assets and associated liabilities of future rent payment are not included in on the balance sheet of the company.

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