This ASC 842 example covers a 10-year office lease starting January 1, 2022, with rent of $5,000 per month for five years, then $6,000 for the next five, at a 4% borrowing rate. With no ownership transfer, purchase option, or fair value determinable, it is classified as an operating lease. The present value of payments is $540,116.39, recorded as a right-of-use asset and liability. Monthly entries capture rent, interest, and amortization, while year-end disclosures show $600,000 in future payments with a $500,806 present value. EZLease setup steps ensure accurate classification and compliance.

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