For a six-year capital lease,under SFAS No.13,the portion of the minimum lease payment in the third year applicable to the reduction of the obligation should be

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According to SFAS No.13, the portion of the minimum lease payment that applies to the reduction of the obligation is calculated using the interest method. In the early years of a lease, the interest component is higher, and as the lease progresses, the principal component increases. Therefore, the portion of the minimum lease payment applicable to the reduction of the obligation should be more in the third year than in the second year.

For a Six-Year Capital Lease,under SFAS No