Financial Statement Reporting for an Operating Lease

Harmeling Paint Ball (HPB) Corporation needs a new air compressor that costs $70,000. HPB will need it for only 3 years even though the compressor's economic life is long enough so that the lease is an operating lease. The firm can lease the compressor for 3 years with $15,000 lease payments at the end of each year. HPB's cost of debt is 9%. Answer the following questions. (Hint: See Table 19-1.)

lease payments at the end of each year. HPB's cost of debt is 9%. Answer the following questions. (Hint: See Table 19-1.) b. What is the initial riaht-of-use asset? Do not round intermediate calculations. Round your answer to the nearest cent. \$ c. What will HPB rebort as the Year-1 lease expense? Round your answer to the nearest cent. Enter your answer as a positive value. d. What is the Year-1 imouted interest expense? Do not round intermediate calculations. Round your answer to the nearest cent. Enter your answer as a positive value. $ e. What lease liability must be reported at Year 1 ? Do not round intermediate calculations. Round your answer to the nearest cent. Enter your answer as a positive value. 1. What riaht-or-use asset must be reported at Year 1 ? Do not round intermediate calculations. Round your answer to the nearest cent