Answer: $ 200 000 will be treated as an expense
Step-by-step explanation:
operating lease agreement is a lease where one Party (lessor) allows another party to use an asset without transferring ownership of the asset to the lessee.
Operating lease rental payments are treated as an expense in the financial statements because the company on pays for the use the asset.
The lease modifications will be treated as an expense because the lease is an operating lease agreement. The $200000 increase of Lease payments will be treated as an expense.