← Chapter 20 - Homework Question 5 of 7 View Policies Show Attempt History < > Current Attempt in Progress 2.86/14 E : The following facts pertain to a non-cancelable lease agreement between Alschuler Leasing Company and McKee Electronics, a lessee, for a computer system. Commencement date Lease term Economic life of leased equipment Fair value of asset at October 1, 2025 October 1, 2025 6 years 6 years $313,043 Book value of asset at October 1, 2025 $280,000 Residual value at end of lease term -0- Lessor's implicit rate 8 % 8% Lessee's incremental borrowing rate Annual lease payment due at the beginning of each year, beginning with October 1, 2025 $62,700 The collectibility of the lease payments is probable by the lessor. The asset will revert to the lessor at the end of the lease term. The straight-line depreciation method is used for all equipment. The following amortization schedule has been prepared correctly for use by both the lessor and the lessee in accounting for this lease. The lease is to be accounted for properly as a finance lease by the lessee and as a sales-type lease by the lessor. Date Lease Payment/Receipt Interest (8%) on Unpaid Liability/Receivable Reduction of Lease Liability/Receivable Balance of Lease Liability/Receivable 10/01/25 $313,043 10/01/25 $62,700 $62,700 250,343 10/01/26 62,700 $20,027 42,673 207,670 10/01/27 62,700 16,614 46,086 161,584 10/01/28 62,700 12,927 49,773 111,811 10/01/29 62,700 8,945 53,755 58,056 10/01/30 62,700 4,644 58,056 -0- $376,200 $63,157 $313,043 (a) - Your answer is partially correct. Assuming the lessee's accounting period ends on September 30, answer the following questions with respect to this lease agreement. (Round answers to O decimal places e.g. 58,971.) (1) What items and amounts will appear on the lessee's income statement for the year ending September 30, 2026? $ AA 19,636 Interest Expense 52,174 Amortization Expense (2) What items and amounts will appear on the lessee's balance sheet at September 30, 2026? Balance Sheet (Partial) Non-current Assets: Lease Liability Current Liabilities: Lease Liability Long-term Liabilities: Right-of-Use Asset September 30, 2026 $ 51,800 +A A 164,199 260,869 (3) What items and amounts will appear on the lessee's income statement for the year ending September 30, 2027? 16,420 Interest Expense 41,361 Amortization Expense (4) What items and amounts will appear on the lessee's balance sheet at September 30, 2027? Balance Sheet (Partial) September 30, 2027 Non-current Assets: Lease Liability Current Liabilities: Lease Liability Long-term Liabilities: Right-of-Use Asset (b) eTextbook and Media Solution List of Accounts Save for Later $ A +A 128,819 $ 165,441 SUPPORT Assistance Used Attempts: unlimited Submit Answer The parts of this question must be completed in order. This part will be available when you complete the part above.