In 2022 a firm signed an operating lease for 6 years with annual payments of $24,000 to be remitted at the end of each year. The interest rate is 5%.

a. What are the financial statement effects at the inception of the lease (you can round to the dollar)?

Assets	=	Liabilities	+	Equity		Sales	-	Expenses	=	Profit

b. How much would the Lease Liability be reduced in the first year? Would that lease liability reduction be higher, lower, or the same if the lease was a finance lease?

c. Would that first year lease liability reduction be higher, lower, or the same if the lease was a finance lease?

d. By how much would the Assets of the firm go up at inception if this lease was signed in 2010, under the old rules?