An operating lease should be recorded in the lessee's accounts at the inception of the lease at an amount equal to

A) the present value of the minimum lease payments less the executory costs included in the minimum lease payments
B) the total value of the future rental payments less any estimated contingent payments
C) the total value of the future rental payments less any executory payments included in the future payments
D) none of these

Executory Costs

Refers to the costs related to executing a lease that are neither initially capitalized nor recognized in the income statement immediately, typically involving future operating expenses under a lease agreement.

Minimum Lease Payments

The lowest amount that a lessee is obligated to pay over the lease term, excluding costs for services such as insurance and maintenance.

Operating Lease

An operating lease is an agreement allowing someone to use an asset without ownership, typically for shorter periods, and expenses are recorded as operating expenses.