A short term lease is treated as an executory contract and lease expense is recorded as the leased asset is used. Lessees do not record an asset or liability at the lease's commencement date.
A lease executory contract, also known as a " lease contract" or a " tenancy agreement", is a contract between a landlord and a tenant in which the tenant agrees to rent a property from the landlord for a specified period of time.
The contract may also specify the amount of rent to be paid, the length of the lease, and other terms and conditions. A lease is a contract in which one party agrees to rent an asset—in this case, property—owned by another party.
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