(20 minutes; 25 points) Use the information below to answer the following questions related to lease accounting. Sh your work to enable me to provide you with partial credit, and clearly label your answer. On January 1, 2019, the Smith Building Company (SBC) leased equipment from the Novak Equipment Company (NEC). The lease contains the following terms and provisions: The lease has a term of 4 years, and the equipment has an economic life of 5 years. The annual rental payment is $50,000, payable at the end of each year. The interest rate implicit in the lease is 10% and is known to SBC. The equipment has an unguaranteed residual value of $15,000. The fair value of the equipment is $168,738.45. The present value of the unguaranteed residual value is $10,245.20. Both SBC and NEC use the straight-line method to depreciate similar equipment. The present value factors are as follows (n is the number of periods): Table 3 "The Present Value of $1" " 8.0% 9.0% 10.0% 12.0% 14.0% 1 0.925926 0.917431 0.909091 0.892857 0.877193 2 0.857339 0.841680 0.826446 0.797194 0.769468 3 0.793832 0.772183 0.751315 0.711780 0.674972 4 0.735030 0.708425 0.683013 0.635518 0.592080 5 0.680583 0.649931 0.620921 0.567427 0.519369 6 0.630170 0.596267 0.564474 0.506631 0.455587 7 0.583490 0.547034 0.513158 0.452349 0.399637 Table 4 "The Present Value of an Ordinary Annuity" " 8.0% 9.0% 10.0% 12.0% 14.0% 1 0.925926 0.917431 0.909091 0.892857 0.877193 2 1.783265 1.759111 1.735537 1.690051 3 2.577097 2.531295 The present value factors are as follows (n is the number of periods): Table 3 "The Present Value of $1" " 8.0% 9.0% 10.0% 12.0% 14.0% 1 0.925926 0.917431 0.909091 0.892857 0.877193 2 0.857339 0.841680 0.826446 0.797194 0.769468 3 0.793832 0.772183 0.751315 0.711780 0.674972 0.735030 0.708425 0.683013 0.635518 0.592080 S 0.680583 0.649931 0.620921 0.567427 0.519369 0.630170 0.596267 0.564474 0.506631 0.455587 0.583490 0.547034 0.513158 0.452349 0.399637 Table 4 "The Present Value of an Ordinary Annuity" 11231 8.0% 9.0% 10.0% 12.0% 14.0% 0.925926 0.917431 0.909091 0.892857 0.877193 1.783265 1.759111 1.735537 1.690051 1.646661 2.577097 2.531295 2.486852 2.401831 2.321632 4 3.312127 3.239720 3.169865 3.037349 2.913712 5 3.992710 3.889651 3.790787 3.604776 3.433081 67 4.622880 4.485919 4.355261 4.111407 3.888668 5.206370 5.032953 4.868419 4.563757 4.288305 Table 5 "The Present Value of an Annuity Due" " 8.0% 9.0% 10.0% 12.0% 14.0% 1 1.000000 1.000000 1.000000 1.000000 1.000000 2 1.925926 1.917431 1.909091 1.892857 1.877193 3 2.783265 2.759111 2.735537 2.690051 2.646661 4 3.577097 3.531295 3.486852 3.401831 3.321632 5 4.312127 4.239720 4.169865 4,037349 3.913712 69 4.992710 4.889651 4.790787 4.604776 4.433081 5.622880 5.485919 5.355261 5.111407 4.888668 Using the space below, prepare the lease table for the Novak Equipment Company (the lessor) for January 1, 2019, and December 31, 2019/2020/2021/2022. Use the insert table tool to help you input your answer. Edit View Insert Format Tools Table V 12pt Paragraph BIU A: 8 pts Using the space below, prepare the accretion schedule for the unguaranteed residual asset for the Novak Equipment Company (the lessor) for January 1, 2019, and December 31, 2019/2020/2021/2022. Edit View Insert Format Tools Table 12pt Paragraph BIU A Specifically, what type of lease is this for the Smith Building Company? Edit View Insert Format Tools Table 12nt n 2 pts ements nts erdings Question 16 What type of lease is this for the Novak Equipment Company? Edit View Insert Format Tools Table 3 12pt Paragraph BIUA 23 2 3 p If accretion is treated as interest income, how much total interest income will Novak Equipment Company recognize in 2019? Edit View Insert Format Tools Table 12pt Parseman +