Question: 1. [Lease classification and financial statement effects; CFA adapted] On January 1, 2001, a company entered into a capital lease, recording a balance sheet obligation

1. [Lease classification and financial statement effects; CFA adapted] On January 1, 2001, a company entered into a capital lease, recording a balance sheet obligation of $10,000, using an interest rate of 12%. The lease payment for 2001 was $1,300. Compute each of the following (i) Interest expense for 2001 (li) The lease obligation at the end of 2001 (ii) The effect of the lease payments on each of the three components of cash flow for 2001 (iv) Each of items (1) through (iii) if the lease had been recorded as an operating lease

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