The Harris Company is the lessee on a four-year lease with the following payments at the end
Question:
The Harris Company is the lessee on a four-year lease with the following payments at the end of each year:
Year 1:$17,000
Year 2:$22,000
Year 3:$27,000
Year 4:$32,000
An appropriate discount rate is 7 percentage, yielding a present value of $81,556.
a-1.If the lease is an operating lease, what will be the initial value of the right-of-use asset?
a-2.If the lease is an operating lease, what will be the initial value of the lease liability?
a-3.If the lease is an operating lease, what will be the lease expense shown on the income statement at the end of year 1?
a-4.If the lease is an operating lease, what will be the interest expense shown on the income statement at the end of year 1?(Leave no cells blank - be certain to enter "0" wherever required.)
a-5.If the lease is an operating lease, what will be the amortization expense shown on the income statement at the end of year 1?(Leave no cells blank - be certain to enter "0" wherever required.)
b-1.If the lease is a finance lease, what will be the initial value of the right-of-use asset?
b-2.If the lease is a finance lease, what will be the initial value of the lease liability?
b-3.If the lease is a finance lease, what will be the lease expense shown on the income statement at the end of year 1?(Leave no cells blank - be certain to enter "0" wherever required.)
b-4.If the lease is a finance lease, what will be the interest expense shown on the income statement at the end of year 1?(Round your answer to the nearest dollar amount.)
b-5.If the lease is a finance lease, what will be the amortization expense shown on the income statement at the end of year 1?(Round your answer to the nearest dollar amount.)