• Beta owns a truck that cost $160,000 and has a useful life of 15 years.
• On January 1, Angel leased the truck for three years. Lease payments are $10,000 at the end of year one, $12,000 at the end of year two, and $16,000 at the end of year three. Interest is 2%.

• Compute the ROU Asset that Angel will report on 1/1. (4 points)

• What is the lease expense that Angel will report each year? (2 points)

• What amount(s) does Beta report in the income statement for each year related to this lease? (2 points)

• What amount of ROU asset will Angel report on the 12/31/year 1 balance sheet? (2 points)