Redo Mini-Exercise M10-16 but now assume the payments are made on January 1 of each year (including the first year January 1, 2020).

Data from M10-16:

On January1, 2020, Samuels, Inc., purchased a building for $2 million to be leased. The building is expected to have a 45-year life with no salvage value. The building was leased immediately by Verdi Corp. (a calendar year-end company) for $130,000 a year payable December 31 of each year. The lease term is five years. The rate of interest implicit in the lease is 7%. The lease is classified as an operating lease.

a. Prepare an amortization schedule of the lease liability.

b. Prepare an amortization schedule for the right-of-use asset.

c. Prepare the entries for Verdi Corp for the years 2020 and 2021.