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

Year 1:	$	20,000
Year 2:	$	25,000
Year 3:	$	30,000
Year 4:	$	35,000

An appropriate discount rate is 7 percentage, yielding a present value of $91,718. 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?

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?

b-1. If the lease is a finance lease, what will be the 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?

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?

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?

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?