Which journal entry does a lessee make to recognize leases other than short-term leases?

In the context of lease accounting, particularly under the new guidance provided by ASC 842, when a lessee recognizes a lease, they record two primary entries: a right-of-use asset and a lease liability. The right-of-use asset represents the economic benefits expected to be derived from the leased asset over the lease term, while the lease liability reflects the obligation to make lease payments.

The journal entry that the lessee makes involves debiting the Right of Use Asset and crediting the Lease Liability. This entry is critical as it recognizes both the asset that the lessee controls during the lease term and the associated liability that represents their commitment to make payments.

This accounting treatment provides a clearer picture of a lessee's financial position by bringing previously off-balance sheet leases onto the balance sheet, thus enhancing transparency and comparability in financial statements. Other options reflect different financial transactions that do not pertain to the recognition of leasing arrangements in accordance with the new lease accounting standards.