Convert operating leases into capital leases and describe the impact of the conversion on the companys balance sheet on 12/31/2020 and income statement for the fiscal year ending on 12/31/2020 (operating lease versus capital lease) in terms of dollar amount and related journal entries. The companys rent expense is $1,000 (million) in 2020 The company pays all rent expenses in the year of incurrence The companys overall effective annual interest rate is 10% Future minimum rent payments required under existing operating leases are Explain why the total amount of expenses recognized is the same for capital leases and operating leases

• The companys rent expense is $1,000 (million) in 2020
• The company pays all rent expenses in the year of incurrence
• The companys overall effective annual interest rate is 10%
• Future minimum rent payments required under existing operating leases are

year	money
2021	1000
2022	1000
2023	1000
2024	1000
2025	1000

thereafter 5 years

5000