Wal-Mart Stores, Inc., is the world's largest retailer. A large portion of the premises that the company occupies are leased. Its financial statements and disclosure notes revealed the following information:

Required:
1. Discuss some possible reasons why Walmart leases rather than purchases most of its premises.
2. The net asset "property under capital lease" has a 2014 balance of $2,543 million ($5,589 - 3,046). Liabili-ties for capital leases total $3,097 ($309 + 2,788). Why do the asset and liability amounts differ?
3. Prepare a 2014 summary entry to record Walmart's lease payments, which were $600 million. 4. What is the approximate average interest rate on Walmart's capital leases?

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Balance Sheet (S in millions) 2014 2013 Assets Property: Property under capital lease Less: Accumulated amortization $5,589 (3,046) $5,889 (3,147) Liabilities Current liabilities: Obligations under capital leases due within one vear 309 327 Long-term debt: Long-term obligations under capital leases 3,023