None A lease agreement that qualifies as a finance lease calls for annual lease payments of $40,000 over a six-year lease term (also theasset's useful life), with the first payment on January 1, the beginning of the lease. The interest rate is 7%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 itsbalance 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, EVAD of $1 and PVAD of $1)Complete this question by entering your answers in the tabs below.Required ARequired BIf the lessee's fiscal year is the calendar year, what would be the amount of the lease liability that the lessee would report inits balance sheet at the end of the first year? What would be the interest payable?Note: Round your answers to the nearest whole dollar.Lease liabilityInterest payable< Required ARequired B>

A lease is defined as a contractual agreement incorporated between two business entities where one…

A lease agreement that qualifies as a finance lease calls for annual lease payments of $40,000 over a six-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 7%. 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?