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On january 1, 2024, zhang corporation entered into a four-year operating lease. the payments were as follows:

$26,000 for 2024, $20,500 for 2025, $18,000 for 2026, and $14,500 for 2027.
what is the correct amount of total lease expense for 2025?

1 Answer

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Final answer:

The lease expense for Zhang Corporation for the year 2025 corresponds to the payment specified in the lease agreement for that year, which amounts to $20,500.

Step-by-step explanation:

The lease expense for Zhang Corporation in 2025 is simply the amount agreed to be paid for that year, as per the terms of the operating lease. The lease payments agreed upon do not require any additional calculation for interest or present value as they might with a capital lease. Therefore, the correct lease expense for 2025 is the payment due for that year.

The correct amount of total lease expense for 2025 can be calculated by summing up the lease payments for that year. In this case, the payment for 2025 is $20,500. Therefore, the total lease expense for 2025 is $20,500.

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