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What will be the amortization expense

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Reference no: EM133025040

Problem - The Nix Company is the lessee on a four-year lease with the following payments at the end of each year: Year 1: $19,000 Year 2: $24,000 Year 3: $29,000 Year 4: $34,000

An appropriate discount rate is 7 percentage, yielding a present value of $88,331.

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?

Reference no: EM133025040

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