During fiscal 2020, Delta Airlines, which leases most of its aircraft, paid approximately $1.3 billion on its lease contracts-$269 million on financing leases and a little over $1 billion on operating leases.
a. How did the lease payments on contracts with terms of one year or less affect the income statement, balance sheet, and statement of cash flows?
b. How did the lease payments on contracts with terms longer than one year affect the income statement, balance sheet, and statement of cash flows?
c. Discuss how the two different methods affect Delta's capital structure leverage and return on assets for 2020.