Capitalizing Operating Leases

6. Reverse the existing Lease Expense entry currently on the books. In this case, McDonald’s paid $886.4MM in 2000. (Lease expense may be included in another expense category, such as SG&A, etc.) Calculate the implied interest expense portion of the 2000 payment. Here, it’s $6,625.2MM x 7.00% = $463.8MM. ................
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