tarik64

#9, I get it, but if you look at the answer, I have seen this before but never fully understood why exactly the lease expense of an operating lease is LESS than the sum of the interest & depreciation expense (which exists in a capital lease?), and then that reverses later on?
without the need to show an example, cause you know me and FSA are enemies…
we know they are both gona give you the SAME total expense over their life time, agree?
well since interest expense goes down as your principle is going down, the capital lease must occur less interest at the end and more at the beggining…
thus the capital expense will be more than the operating at first, then it would reverse…
hope it helps, i dont feel like reading the first question lol