the elements of lessor account:

lease liability:

• lease payable
• residual value guarentees
• option to purchase in certain
• termination penalties
• discount rate /incremental borrowing rate

right_of _use asset

• lease liability
• at or before inception(commence)
• inotal direct cost
• estimate removing cost

lease term

• non cancelled tern(period)
• option to extend in certain
• terminate in certain

initial entry:

• Dr right-to -use asset
• Cr  Lease liability
• Cr cash
• Cr defored cost

sunbsequentl entry:

interest cost (financial cost)

• Dr finance Cost 
• Cr lease liability

cash payment

• Dr lease leability
• Cr Cash 

Dr P/L (current liability)

Cr Accumulated depreciation  

annual depreciation=right to use asset/lease term