1. Consider the case where this year you will begin a seven-year lease for a stallion that has a market value of $280,000 and has an expected useful life of 7 years with no expected salvage value (so while there is no buyout option, the lease DOES exhaust the horse's value as a financial asset). Seven lease payments of $46,393 are due to be paid with the first payment made when the horse is acquired and the remainder due annually thereafter. Demonstrate how this asset would be reflected on the lessee firm's financial statements at the end of 2023 as if it were considered to be (a) an operating lease or (b) a capital lease. (8 points)