Rasec

Two corrections on magicskyfairy's notes:

1)Principal payments are recorded as a financing cash outflow not an investing (since we are talking about lessee).

2)In the first year of the lease the full amount of lease payment is recorded as financing CF
(i.e. $ 200) and is not broken down to interest expense ($ 77.22) and principal payment ($122.78).

The breaking down occurs in the second year.

I do not know the reason but that's what CFAI text (p.94, example 11) says.