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A five year lease, appropriately classified as operating, calls for annual payments of $20,000 every January 1, beginning at the lease inception date of
A five year lease, appropriately classified as operating, calls for annual payments of $20,000 every January 1, beginning at the lease inception date of January 1, 2022. As an incentive to win the business, the lessor customarily offers a deep discount on the first year's rent, and only charges $4,000 on January 1, 2022. The remaining four payments remain in the contract at $20,000. What amount of lease expense will appear on the lessee's 2022 income statement?
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