Disclosure Requirements—Operating Leases
Jaquar Mining and Manufacturing Company leases from Emory Leasing Company three machines under the following terms.
• Machine 1: Lease period—10 years, beginning April 1, 2002; lease payment—$18,000 per year, payable in advance.
• Machine 2: Lease period—10 years, beginning July 1, 2006; lease payment—$30,000 per year, payable in advance.
• Machine 3:Lease period—15 years, beginning January 1,2007;lease payment—$12,500 per year, payable in advance. All of the leases are classified as operating leases.
Instructions: Prepare the note to the 2008 financial statements that would be required to disclose the lease commitments of Jaquar Mining and Manufacturing Company. Jaquar uses the calendar year as its accounting period.