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What is the amount of expense on this operating lease

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Question :

Rivero Corporation purchased a machine on January 1, 2018 for $1,500,000 with an expected life of 10 years for the date of purchase. There is no residual value, and it is to be depreciated on a straight-line basis. On January 1, 2018, Halle Berry Company leased the machine from Rivero Corp for 3 years at a monthly rate of $32,000 In addition, Halle Berry paid a lease bonus of $75,000.

A)  What is the amount of income on this operating lease, should Rivero Corp (lessor) report for the year ended December 31, 2018?

B)  What is the amount of expense on this operating lease, should Halle Berry Corp (lessee) report for the year ended December 31, 2018?

Reference no: EM132318639

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