An operating lease is a type of rental agreement that gives the lessor control of an asset for a predetermined period at a fixed rate. With an operating lease, the lessor is responsible for maintenance of the asset and all related costs. To keep track of these costs, the lessor must make journal entries in their books. This includes recording payments from the lessee, and any depreciation charges associated with the asset over the life of the agreement. By keeping accurate records and making the proper journal entries, the lessor can ensure that their operating lease is compliant with financial laws and regulations.