Operating Versus Capital Lease Although companies are now required to report capital leases on their balance sheets and operating leases within their financial statements, there are distinct advantages and disadvantages of each type of lease. In this Discussion, you will apply concepts of lease accounting and capital versus operating leases to a scenario of your choice.

With these thoughts in mind:

Post a scenario for which a capital or operating lease is most appropriate and explain why. In your post, be sure to differentiate the leases and how the choice is reflected on financial statements.