A lease agreement that qualifies as a capital lease calls for annual lease payments of $26,269 over a six-year lease term, with the first payment at January 1, the leases inception. The interest rate is 5%.

If lessees fiscal year is the calendar year, what would be the amount of the lease liability that the lessee would report in its balance sheet at the end of the first year?

If Lessees fiscal year is the calendar year, complete the amortization schedule for the first two payments.