The Harris Company is the lessee on a four-year lease with the following payments at the end of each year: Year 1: Year 2: Year 3: Year 4: $14,000 $19,000 $24,000 $29,000 An appropriate discount rate is 7 percentage, yielding a present value of $71,395. a-1. If the lease is an operating lease, what will be the initial value of the right- of-use asset? Initial value of the right-of-use asset a-2. If the lease is an operating lease, what will be the initial value of the lease liability? Initial value of the lease liability 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? Lease expense 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.) Interest expense 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 "O" wherever required.) Amortization expense b-1. If the lease is a finance lease, what will be the initial value of the right-of- use asset? Initial value of the right-of-use asset b-2. If the lease is a finance lease, what will be the initial value of the lease liability? Initial value of the lease liability 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.) Lease expense The Harris Company is the lessee on a four-year lease with the following payments at the end of each year: Year 1: Year 2: Year 3: Year 4: $14,000 $19,000 $24,000 $29,000 An appropriate discount rate is 7 percentage, yielding a present value of $71,395. a-1. If the lease is an operating lease, what will be the initial value of the right- of-use asset? Initial value of the right-of-use asset a-2. If the lease is an operating lease, what will be the initial value of the lease liability? Initial value of the lease liability 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? Lease expense 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.) Interest expense 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 "O" wherever required.) Amortization expense b-1. If the lease is a finance lease, what will be the initial value of the right-of- use asset? Initial value of the right-of-use asset b-2. If the lease is a finance lease, what will be the initial value of the lease liability? Initial value of the lease liability 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.) Lease expense
