Question
The Harris Company is the lessee on a four-year lease with the following payments at the end of each year: Year 1: $ 17,000 Year
The Harris Company is the lessee on a four-year lease with the following payments at the end of each year:
| Year 1: | $ | 17,000 |
| Year 2: | $ | 22,000 |
| Year 3: | $ | 27,000 |
| Year 4: | $ | 32,000 |
An appropriate discount rate is 7 percentage, yielding a present value of $81,556. a-1. If the lease is an operating lease, what will be the 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?
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?
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.)
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.)
b-1. If the lease is a finance lease, what will be the initial value of the right-of-use asset?
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The Oxford Handbook Of Pricing Management
Authors: Ozalp Ozer, Robert Phillips
1st Edition
0199543178, 978-0199543175
