Who is the party paying the rent to use the asset in a lease?

Who is the party paying the rent to use the asset in a lease?

• A. Lessor
• B. Lessee
• C. Owner
• D. Tenant

Answer: (B)

In a lease, the person who gains the right to use the asset does so by paying for that right. This party is called the lessee. The lessee makes the rent payments to the other party, who owns and provides the asset, known as the lessor. The owner retains ownership, while the lessee uses the asset for the lease term in exchange for rent. The term tenant is often used in everyday language for someone renting, but in leasing and accounting contexts the precise term for the payer is lessee. So the party paying to use the asset is the lessee.

In a lease, the person who gains the right to use the asset does so by paying for that right. This party is called the lessee. The lessee makes the rent payments to the other party, who owns and provides the asset, known as the lessor. The owner retains ownership, while the lessee uses the asset for the lease term in exchange for rent. The term tenant is often used in everyday language for someone renting, but in leasing and accounting contexts the precise term for the payer is lessee. So the party paying to use the asset is the lessee.