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What amortization expense shown on the income statement

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Reference no: EM132991478

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

Year 1: $15,000

Year 2: $20,000

Year 3: $25,000

Year 4: $30,000

An appropriate discount rate is 7 percentage, yielding a present value of $74,782.

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?

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?

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?

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?

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?

Reference no: EM132991478

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