A lease agreement that qualifies as a finance lease calls for annual lease payments of $30,000 over a five-year lease term (also the assets useful life), with the first payment at January 1, the beginning of the lease. The interest rate is 4%. (FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1) (Use appropriate factor(s) from the tables provided.) Required: a. Complete the amortization schedule for the first two payments. b. If the 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? What would be the interest payable?

Date January 1, Year 1 January 1, Year 1 January 1, Year 2 s Lease Payment 30,000 30,000 (2 Effective Interest s Decrease in Balance O S 1,642 X 30,000 28,358 Outstanding Balance S 167,787 x 137,787 109,429 If the lessee's 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? What would be the interest payable? (Round your answers to the nearest whole dollar.) Lease liability Interest payable