6 years 6 years The following facts pertain to a noncancelable lease agreement between Oriole Leasing Company and Mckee Electronics, a lessee, fom a computer system. Inception date October 1, 2017 Lease term Economic life of leased equipment Fair value of asset at October 1, 2017 $289,737 Residual value at end of lease term -0- Lessor's implicit rate 11 % Lessee's incremental borrowing rate 11 % Annual lease payment due at the beginning of each year, beginning with October 1, 2017 $61.700 The collectibility of the lease payments is reasonably predictable, and there are no important uncertainties surrounding the costs yet to be incurred by the lessor. The lessee assumes responsibility for all executory costs, which amount to $5,800 per year and are to be paid each October 1, beginning October 1, 2017. (This $5,800 is not included in the rental payment of $61,700.) 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 capital lease by the lessee and as a direct-financing lease by the lessor. Annual Lease Interest (11%) on Unpaid Reduction of Lease Balance of Lease Date Payment/Receipt Liability/Receivable Liability/Receivable Liability/Receivable 10/01/17 $289,737 10/01/17 5 61.700 $61.700 229.037 10/01/18 61,700 525.084 36.616 191.421 10/01/19 61 700 21.056 40,644 150,777 10/01/20 61.700 16,585 45.115 105.662 10/01/21 61,700 11.623 30.077 55,585 10/01/22 61.700 6.115 55.585 -O- $370.200 580.463 $289.737 Assuming the lessor's accounting period ends on September 30 answer the following questions with respect to the lease agreement, (Round answers to decimal places eg. 58.971.) (1) What items and amounts will appear on the lessor's income statement for the year ending September 30, 2018? (2) What items and amounts will appear on the lessor's balance sheet at September 30, 2018? Balance Sheet (Partial) Current Assets Noncurrent Assets $ (3) What items and amounts will appear on the lessor's income statement for the year ending September 30, 2019? $ (4) What items and amounts will appear on the lessor's balance sheet at September 30, 2019? Balance Sheet (Partial) Current Assets Noncurrent Assets W LIST ACCOUNTS (2) What items and amounts will appear on the lessor's balance sheet at December 31, 2017? Balance Sheet (Partial) Current Assets Noncurrent Assets (3) What iemand amounts will appear on the lessor's income statement for the year ending December 31, 2018? (4) What items and amounts will appear on the lessor's balance sheet at December 31, 2018 Balance Sheet (Partial)