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

Year 1:	$	11,000
Year 2:	$	16,000
Year 3:	$	21,000
Year 4:	$	26,000

An appropriate discount rate is 7 percentage, yielding a presentvalue of $61,233.


a-1. If the lease is an operating lease, what willbe the initial value of the right-of-use asset?

a-2. If the lease is an operating lease, what willbe the initial value of the lease liability?

a-3. If the lease is an operating lease, what willbe the lease expense shown on the income statement at the end ofyear 1?

a-4. If the lease is an operating lease, what willbe the interest expense shown on the income statement at the end ofyear 1? (Leave no cells blank – be certain to enter “0”wherever required.)

a-5. If the lease is an operating lease, what willbe the amortization expense shown on the income statement at theend of year 1? (Leave no cells blank – be certain to enter“0” wherever required.)

b-1. If the lease is a finance lease, what will bethe initial value of the right-of-use asset?

b-2. If the lease is a finance lease, what will bethe initial value of the lease liability?

b-3. If the lease is a finance lease, what will bethe lease expense shown on the income statement at the end of year1? (Leave no cells blank – be certain to enter “0” whereverrequired.)

b-4. If the lease is a finance lease, what will bethe interest expense shown on the income statement at the end ofyear 1? (Round your answer to the nearest dollaramount.)

b-5. If the lease is a finance lease, what will bethe amortization expense shown on the income statement at the endof year 1? (Round your answer to the nearest dollaramount.)