You know, we heard in our accounting class today that a few years ago, there were advantages to structuring lease arrangements as operating leases," your study partner said unexpectedly. "Now I'm wondering if that's changing things for companies that lease assets." Not happy with having to suddenly change your train of thought, but now curious, you open a new tab on your laptop and locate the following disclosure note in Microsoft's 2020 financial statements. We have operating and finance leases for datacenters, corporate offices, reasearch and development facilities, retail stores, and certain equipment. Our leases have remaining lease terms of 1 year to 20 years, some of which include options to extend the leases for up to 5 years, and some of whitch include options to terminate the leases within 1 year. The components of lease expense were as follows: $ (in millions) Year Ended June 30, Operating lease cost Finance lease cost: Amortization of right-of-use assets Interest on lease liabilities Total finance lease cost Supplemental cash flow information related to leases was as follows: $ (in millions) Cash paid for amounts included in the measurements of lease liabillities: Operating cash flows from operating leases Operating cash flows from finance leases Financing cash flows from finance leases Maturities of lease liabilities were as follows: $ (in millions) Operating Leases Year Ended June 30, 2021 2022 2023 2024 2025 Thereafter 2020 2019 2018 $2,043 $1,707 $1,585 $ 611 $ 370 $ 243 336 247 175 $ 947 $ 617 $ 418 2020 2019 2018 $1,829 $1,670 $1,522 336 247 175 409 221 144 Finance Leases $ 1,807 $880 1,652 894 1,474 903 1,262 916 1,000 1,236 3,122 7,194 10,317 (1,030) $ 9,287 12,023 (2,527) $ 9,496 Total leases payments Less imputed interest Total Required: 1. What do you notice about the trends in operating versus finance leases for Microsoft? 2. Prepare a journal entry that summarizes the lease payments for Microsoft's finance leases during 2020. Page 901 3. Prepare a journal entry that summarizes the amortization of the right-of-use assets for Microsoft's finance leases during 2020