Krawczek Company will enter into a lease agreement with

Heavy Equipment Co. where Krawczek will make lease

payments over the next five years. The lease is cancelable

and requires equal annual payments of $28.000 per year

beginning on January 1 of the first year. The last payment

will be January 1 of year 5, and Krawczek will continue to

use the asset until December 31 of that year. Other Important

Information Includes the following: The fair value of the

equipment is $190.000. The applicable discount rate is an

8 percent annual rate. The economic life of the asset is 10

years. Krawczek does not guarantee the residual value of the

asset at the end of the lease, and it does not expect to keep

the asset at the end of the term The asset is a standard

plece of equipment a. Is the lease an operating lease or a

financing lease? Operating lease Financing lease b. What will

be the lease expense shown on the Income statement at the

end of year 1? Lease expense c. What will be the Interest

expense shown on the Income statement at the end of year 12

(Leave no cells blank - be certain to enter "0" wherever

required.) Interest expense d. What will be the amortization

expense shown on the Income statement at the end of year 12

(Leave no cells blank - be certain to enter"0" wherever

required.) Amortization expense