What are the financial statement effects at the inception

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Reference no: EM133328385

In 2021 a firm signed an operating lease for 5 years with annual payments of $6,000 to be remitted at the end of each year. The interest rate is 5%.

Question 1: What are the financial statement effects at the inception of the lease (you can round to the dollar)?

Question 2: How much would the Lease Liability be reduced in the first year? Would that lease liability reduction be higher, lower, or the same if the lease was a finance lease?

Question 3: By how much would the Assets of the firm go up at inception if this lease was signed in 2010, under the old rules?

Reference no: EM133328385

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