Comparison of Operating and Capital Lease Refer to the preceding problem. Compare income statement and balance sheet

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Comparison of Operating and Capital Lease Refer to the preceding problem. Compare income statement and balance sheet effects of treating the lease as a capital lease rather than an operating lease. Ignore income taxes. You can do this by filling in the blanks in the following table.

Operating Lease Capital Lease Difference Total expenses Year 1 Year 2 Two years together End of year 1 Total assets Total liabilities Retained earnings End of year 2 Total assets Total liabilities Retained earnings

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