Capital lease with rent expense before start of lease

Disclaimer: I come from the lessor business side and not the accounting world. You describe a standard leasing practice when there are multiple pieces of equipment under a lease, or multiple funding times (e.g., a lengthy construction period) for an equipment project that will be leased, or simply a desire to achieve a consistent or specific repetitive billing cycle date. This is nothing more than interim/additional rent expense for a transaction with a term of, say, 12 quarters and 21 days instead of exactly 12 quarters.

It is, indeed, clear cut. Capitalization is not the correct strategy.

I agree with Jim's response above according to the current guidelines.

There is a Leases Joint Project of the FASB and IASB currently underway, which issued an Exposure Draft in May 2013 and was last updated on October 28, 2014. From what I am seeing, when a final pronouncement is issued the accounting will change and interim rent will be recognized as a rent prepayment and at the commencement date the prepayments will be included in the cash flow discounting to determine the value of the right-of-use asset and capitalized lease obligation.