6 years The following facts pertain to a noncancelable lease agreement between Sage Leasing Company and Mckee Electronics, a lessee, for a computer system. Inception date October 1, 2017 Lease term Economic life of leased equipment 6 years Fair value of asset at October 1, 2017 $354,500 Residual value at end of lease term -0- Lessor's implicit rate 996 Lessee's incremental borrowing rate 9 % Annual lease payment due at the beginning of each year, beginning with October 1, 2017 $72,500 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 $6,100 per year and are to be paid each October 1, beginning October 1, 2017. (This $6,100 is not included in the rental payment of $72,500.) 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 lesson Annual Lease Interest (9%) on Unpaid Reduction of Lease Balance of Lease Date Payment/Receipt Liability/Receivable Liability/Receivable Liability/Receivable 10/01/17 $354,500 10/01/17 $ 72,500 $72,500 282.000 10/01/18 72.500 $25,380 47.120 234,880 10/01/19 72.500 21,139 51.361 183,519 10/01/20 72.500 16,517 55.983 127.536 10/01/21 72.500 11,479 61.022 66,514 10/01/22 72.500 5.986 66,514 -0- $435,000 580.500 $354,500 Assuming the lessor's accounting period ends on September 30, answer the following questions with respect to this lease agreement. (Round answers to 0 decimal places e.g. 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 5 (3) What items and amounts will appear on the lessor's income statement for the year ending September 30, 20197 (4) What items and amounts will appear on the lessor's balance sheet at September 30, 2019? Balance Sheet (Partial) Current A (2 h Noncurrenties cu