7 Review Later Which of the following is not a correct description of how an operating lease is recognized on the financial statements? The amortization expense of the right-of-use asset and the interest expense on the lease liability are recorded as a single item called lease expense on the income statement. The amortization expense of the right-of-use asset is calculated using the straight-line depreciation method over the lease term. A lease liability is recognized on the balance sheet and represents the present value of all remaining lease payments. The interest expense is calculated based on the outstanding lease liability balance.