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The Harris Company is the lessee on a four-year lease with the following payments at the...

The Harris Company is the lessee on a four-year lease with the following payments at the end of each year:

Year 1: $ 11,000
Year 2: $ 16,000
Year 3: $ 21,000
Year 4: $ 26,000


An appropriate discount rate is 7 percentage, yielding a present value of $61,233.


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.)

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