On January 1, 2020, Frozen Yogart Inc. signed a 10 -year lease for its retail outlet. The lease payments, paid semiannually, are based upon semiannual sales and will equal \(5 \%\) of sales with a semiannual sale minimum of \(\$ 500,000\). Based upon the previous three years, average sales per semiannual period are \(\$ 600,000\). Frozen Yogart's incremental borrowing rate is \(6 \%\) and is unaware of the rate implicit in the lease. The lease is considered an operating lease for Frozen Yogart. A \(\$ 25,000\) payment ( \(5 \%\) of \(\$ 500,000\) ) is due immediately on January 1, 2020. Frozen Yogart's accounting year ends June 30.

Required

a. Calculate the lease liability recorded by Frozen Yogart Inc. on January 1, 2020.

b. Calculate the right-of-use asset recorded by Frozen Yogart Inc. on January 1, 2020.

c. Prepare an amortization schedule of the lease liability.

d. Prepare an amortization schedule of the right-of-use asset.

e. Prepare the entries for Frozen Yogart Inc. on January 1, 2020, June 30, 2020, and July 1, 2020.

f. On July 21, 2020, Frozen Yogart reported to the lessor its sales of \(\$ 575,000\) for the semiannual period ended June 30, 2020. Any rent adjustments are due to the lessor at the end of the following month after the sales. Record the adjusting entry required on July 31, 2020.