At the beginning of 20x1, Togo, Inc. entered into a finance lease to acquire equipment. The lease requires four annual payments of $25,663 beginning on December 31, 20x1. The present value of the lease payments, discounted at 8%, is $85,000. The leased asset is expected to be worthless at the end of the lease and Togo uses the straight-line depreciation method.

Based on the information above, suppose Togo is considering whether to treat this as an operating lease instead. For the year ended 20x2, which would be higher?

	The expense related to the finance lease
	The expense related to the operating lease

Neither. The expenses on the two would be identical