Question
1. The structure of leases is shifting from operating leases to finance leases. We know this because the operating lease payments over the next five
1. The structure of leases is shifting from operating leases to finance leases. We know this because the operating lease payments over the next five years and thereafter are declining each year while finance lease payments over the next five years and thereafter are increasing each year.
2. Interest expense (operating cash flow from finance leases) 336 debit
Lease payable (financing cash flow from finance leases) 409 debit
Cash (to balance).................................................... 745 credit
3. Amortization expense (amortization of ROU assets)... 611
Right-of-use asset.................................................. 611
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