The Harris Company is the lessee on a four-year lease with the following payments at the end of each year:

Year 1:	$	13,000
Year 2:	$	18,000
Year 3:	$	23,000
Year 4:	$	28,000

An appropriate discount rate is 7 percentage, yielding a present value of $68,007.

a-1. If the lease is an operating lease, what will be the initial value of the right-of-use asset? $0 (is not the right answer)

a-2. If the lease is an operating lease, what will be the initial value of the lease liability? $0 (is not the right answer)

a-3. If the lease is an operating lease, what will be the lease expense shown on the income statement at the end of year 1?

$13,000 is not the right answer

a-4. If the lease is an operating lease, what will be the interest expense shown on the income statement at the end of year 1? (Leave no cells blank be certain to enter 0 wherever required.) : $0 (do not need this answer)

a-5. If the lease is an operating lease, what will be the amortization expense shown on the income statement at the end of year 1? (Leave no cells blank be certain to enter 0 wherever required.) : $0 (do not need this answer)

b-1. If the lease is a finance lease, what will be the initial value of the right-of-use asset?: $68,007 (do not need this answer)

b-2. If the lease is a finance lease, what will be the initial value of the lease liability? $68,007 (do not need this answer)

b-3. If the lease is a finance lease, what will be the lease expense shown on the income statement at the end of year 1? (Leave no cells blank be certain to enter 0 wherever required.): ____________ $13,000 is not the right answer

b-4. If the lease is a finance lease, what will be the interest expense shown on the income statement at the end of year 1? (Round your answer to the nearest dollar amount.): $4,760 (do not need this answer)

b-5. If the lease is a finance lease, what will be the amortization expense shown on the income statement at the end of year 1? (Round your answer to the nearest dollar amount.) : ________________________ $8,240 is not the right answer