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

Year $Million 2021 1000 2022 1000 2023 1000 2024 1000 2025 1000 Thereafer: 5 years 5,000