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Operating Lease vs. Finance Lease : Compare the financial statement impacts of an operating lease versus a finance lease for a piece of equipment with

  1. Operating Lease vs. Finance Lease: Compare the financial statement impacts of an operating lease versus a finance lease for a piece of equipment with annual payments of $10,000 over 5 years. The interest rate implicit in the lease is 6%. Discuss how each type of lease affects the balance sheet, income statement, and cash flow statement.

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