The company that I work for purchased and financed equipment for the purpose of leasing it to another company that was unable to get financing. I've entered the loan as a liability, with appropriate principal and interest payments for the first year. Can I enter the lease as an asset, as a "lease receivable" with principal payments reducing the receivable, and interest income offsetting the interest expense? Or should I show the equipment as a fixed asset on our books? If so, I'm not certain how to show the principal payments from the other company, since this is not really income for our company.