Question 3: Converting Operating Leases to Capital Leases

Company will convert the operating lease to capital lease. Please see information below to determine the present value of projected operating lease payment and lease amortization.

Instructions:

a] Estimate the length of the remaining period beyond 3 year of operating lease b]Beginning year of lease balance of 2004 is $4,500 with 4.5% as a discount rate to determining the present value. c] The lease payments for 2004