In: Accounting
Financial Statement Reporting for an Operating Lease
Harmeling Paint Ball (HPB) Corporation needs a new air compressor that costs $80,000. HPB will need it for only 4 years even though the compressor's economic life is long enough so that the lease is an operating lease. The firm can lease the compressor for 4 years with $15,000 lease payments at the end of each year. HPB's cost of debt is 11%. Answer the following questions. (Hint: See Table 19-1.)
$_____
$______
$_____
$_____
$_____
$_____