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

Year 1:	$	13,500
Year 2:	$	18,500
Year 3:	$	23,500
Year 4:	$	28,500

An appropriate discount rate is 7 percentage, yielding a present value of $69,701.

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?

(answer is not 13,500)

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.)

(answer is not $8,621)