A lease agreement that qualifies as a finance lease calls for annual lease payments of $40,000 over a eight-year lease term(also the asset's useful life), with the first payment on January 1, the beginning of the lease. The interest rate is 4%.Required:a. Complete the amortization schedule for the first two payments.b. If the lessee's fiscal year is the calendar year, what would be the amount of the lease liability that the lessee would reportin its balance sheet at the end of the first year? What would be the interest payable?Note: Use tables, Excel, or a financial calculator. (FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1)Complete this question by entering your answers in the tabs below.Required A Required BComplete the amortization schedule for the first two payments.Note: Enter all amounts as positive values. Round your answers to the nearest whole dollar.DateJanuary 1, Year 1January 1, Year 1January 1, Year 2$LeasePayment40,000 $EffectiveInterest1,600Decrease inBalance< Required A0OutstandingBalance$40,000Required B>

A lease agreement that qualifies as a finance lease calls for annual lease payments of $40,000 over a eight-year lease term (also the asset's useful life), with the first payment on January 1, the beginning of the lease. The interest rate is 4%. Required: a. Complete the amortization schedule for the first two payments. b. If the lessee's fiscal year is the calendar year, what would be the amount of the lease liability that the lessee would report in its balance sheet at the end of the first year? What would be the interest payable?

A lease agreement that qualifies as a finance lease calls for annual lease payments of $40,000 over a eight-year lease term (also the asset's useful life), with the first payment on January 1, the beginning of the lease. The interest rate is 4%. Required: a. Complete the amortization schedule for the first two payments. b. If the lessee's fiscal year is the calendar year, what would be the amount of the lease liability that the lessee would report in its balance sheet at the end of the first year? What would be the interest payable?

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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2.
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