A$18-11$ Lessee Accounting; Amortization Table; Entries: $($LO $18-2,18-4)$

Watson Co$.$ entered into a lease arrangement for a truck on $1$ April $202$ that had the following terms:

The lease payments are $$13,400$ per year, payable each $1$ April for four years. The lease may be renewed at the option of the lessor for a further five years for $$4,000$ per year.

Based on an allocation of the lease payment on relative stand$-$alone prices, the lease and non$-$lease components $($maintenance$)$ are $$12,100$ and $$1,300$ respectively.

Expected amounts to be pald under the residual value guarantee are $$11,400$ if the lessee ends the lease at the end of the first lease term, and $$3,800$ if they end the lease at the end of the second lease term.

The leased asset has a useful life of ten years and a fair value of $$64,000.$ The interest rate implicit in the lease is $8\%.$

$($PV of $$1,$ PVA of $$1,$ and PVAD of $$1.)($Use appropriate factor$($s$)$ from the tables provided.$)$

Required:

$1-$a$.$ Calculate the nght$-$of$-$use asset $($Round the Intermedlate and final answer to the nearest whole dollar amount$)$

Right$-$of$-$use asset

$1-$b$.$ Record the Initial journal entry. $($If no entry is required for a transaction$/$event$,$ select $"$No journal entry required" In the first account field. Round intermedlate calculations and final answers to the nearest whole dollar amount.$)$

$\backslash$table$[[$No$,$Transaction,General Journal,Debit,Credit$],[$A$,1,$Right$-$of$-$use asset,$56,772,],[,,$Maintenance expense,$1,300,],[,,$Cash,,$13,400],[,,$Lease liability,,$44,672]]$

Prexy

$2$ of $3$

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