Financial Statement Reporting for an Operating Lease

Harmeling Paint Ball (HPB) Corporation needs a new air compressor that costs $90,000. HPB will need it for only 3 years even though the compressor's economic life is long enough so that the lease is an operating lease. The firm can lease the compressor for 3 years with $35,000 lease payments at the end of each year. HPB's cost of debt is 15%. Answer the following questions. (Hint: See Table 19-1.)

F. What right-of-use asset must be reported at Year 1? Do not round intermediate calculations. Round your answer to the nearest cent.

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