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The Harris Company is the lessee on a four-year lease with the following payments at the...

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?

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Answer #1

Questions a 1) :- If the lease is an operating lease, what will be the initial value of the right-of-use asset?

Answer :- $0

Questions a 2):-  :-If the lease is an operating lease, what will be the initial value of the lease liability?

Answer :- $0

Questions 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?

Answer :- $20,000

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