Question: On December 31, 2016, Continuous Computing leased a set of servers from Harrys Hardware with annual payments of $45,000 for 3 years. The servers are

On December 31, 2016, Continuous Computing leased a set of servers from Harrys Hardware with annual payments of $45,000 for 3 years. The servers are expected to have a useful life of 4 years and have an ordinary selling price of $140,000. Continuous Computings average borrowing rate is 6%. On January 1, 2018, the lease is renegotiated to be extended by two years and lease payments increase to $65,000 per year, effective immediately. Harrys Hardware originally purchased the servers for $80,000 and depreciates all assets according to the straight-line method. PLEASE PLEASE SHOW ME WHERE ARE THE NUMBERS COMING FROM.

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