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2. Assuming that the lease is accounted for as a finance lease, what financial effects will be recorded with regard to the lease on December
2. Assuming that the lease is accounted for as a finance lease, what financial effects will be recorded with regard to the lease on December 31 (at the end of the first year)? Note: Round all entries to three decimal points. Use rounded amounts in any further calculations. $ 0x million Item Increase/Decrease Cash Decrease Interest expense Increase Lease obligation Decrease Amortization expense Increase Leased asset Decrease $ 0x million $ 0 x million $ 0x million $ 0 x million I 3. What are the total expenses associated with the lease in the second year if it is accounted for as an operating lease? As a finance lease? Note: Round all entries to three decimal points. Expense Item (millions) Operating Lease Finance Lease Operating lease expense $ 0 X $ O Interest expense $ 0 $ 0 x Amortization expense $ 0 $ 0 X Total $ 0 x $ 0 x Check Lease Accounting. On January 1, Moran Inc. entered into a noncancelable 10-year lease for computer equipment with a fair value of $153 million and requiring annual $22.826 milion year-end lease payments. The company's year-end is December 31. The implicit interest rate is 8%. Required 1. Assuming that the lease is accounted for as a finance lease, what financial effects will be recorded in the financial statements with regard to the lease on January 1? Note: Use Excel and round to the nearest million (i.e. show 128.543 as 129). A Finance lease asset and a finance lease liability will be capitalized on the balance sheet for: $ x million. 2. Assuming that the lease is accounted for as a finance lease, what financial effects will be recorded with regard to the lease on December 31 (at the end of the first year)? Note: Round all entries to three decimal points. Use rounded amounts in any further calculations. Item Increase/Decrease Cash Decrease Interest expense Increase Lease obligation Decrease Amortization expense Increase Leased asset Decrease $ 0 x million 0 X million 0x million 0x million 0.X million $ $ 3. What are the total expenses associated with the lease in the second year if it is accounted for as an
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