Walmart Inc. is the world’s largest retailer. A large portion of the premises that the company occupies are leased. Its financial statements revealed the following information:

Required:
1. The net asset “Finance lease right-of-use assets, net” has a July 31, 2020 balance of $4,843 million. Liabilities for these leases total $5,222 ($549 + $4,673). Why do the asset and liability amounts differ?
2. Prepare a journal entry that summarizes Walmart’s finance lease payments for the twelve months ended July 31, 2020. Walmart’s income statement reports finance lease interest of $331 million.

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(Amounts in millions) Assets Operating lease right-of-use assets, net Finance lease right-of-use assets, net Liabilities Current liabilities: Operating lease obligations due within one year Finance lease obligations due within one year Long-term debt: Long-term operating lease obligations Long-term finance lease obligations July 31, 2020 $16,869 4,843 1,734 549 15,669 4,673 July 31, 2019 $17,239 3,949 1,795 439 16,079 3,915