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Leased assets have an expected life of 5 years. Depreciation is straight line. Annual lease payment is $1,400. Interest rate is 12%. Show your work!

Leased assets have an expected life of 5 years.

Depreciation is straight line.

Annual lease payment is $1,400.

Interest rate is 12%.

Show your work!

Question 1

Find the present value of the stream of lease payments in Exhibit. This is the Beginning-Year Liability

Question 2

Find the depreciation of an asset with an expected life of 5 years and a value equal to the present value of the lease payments in Exhibit.

Question 3

Find the total expense in Year 1 if exhibit refers to an Operating Lease

Question 4

Find the total expense in Year 1 if exhibit refers to a Capital Lease

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