Estimating Lease Liability

Wesfolk and Eastern $($the Company$)$ is a major transportation company. This is an excerpt $($adapted by the authors$)$ from Note $6$ to the Company$’$s Year $8$ annual report.

Long$-$Term Debt The Company$’$s noncancelable long$-$term leases generally include options to purchase at fair value and to extend the terms. Finance leases have been discounted at rates ranging from $3\mathrm{.}09\%$ to $14\mathrm{.}26\%$ and are collateralized by assets with a net book value of $$299$ million at December $31$ of Year $8.$ Minimum commitments, exclusive of nonlease costs borne by the Company are:

$ millions Finance Leases

Year $9$ $$83$

Year $1068$

Year $1154$

Year $1251$

Year $1347$

Year $14$ through Year $28175$

Total $$478$

Imputed interest on $fi$nance lease at an average rate of $8\mathrm{.}4\%(126)$

Lease liability included in debt $$352$

Required

Provided that lease payments occur evenly throughout the year, estimate the decline in the 

$fi$nance lease liability in Year $8.$

$●$ Note: Do not use negative signs with your answer.

$●$ Note: Round your answers to two decimal places.

Decline in finance lease liability in Year $8$ assuming payments occur at the end of the year: 

Decline in finance lease liability in Year $8$ assuming payments occur at the beginning of the year:  

Decline in finance lease liability in Year $8$ assuming payments occur evenly throughout the year using the average of payments above: 

$\mathrm{ }$