A lease agreement that qualifies as a finance lease calls for annual lease payments of $$50,000$ over a four$-$year lease term $($also the

asset's useful life$),$ with the first payment on January $1,$ the beginning of the lease. The interest rate is $7\%.$ The lessor's fiscal year is the

calendar year. The lessor manufactured this asset at a cost of $$144,000.$

Required:

a$.$ Determine the price at which the lessor is "selling" the asset $($present value of the lease payments$).$

b$.$ Create a partial amortization table through the second payment on January $1,$ Year $2.$

c$.$ What would be the increase in earnings that the lessor would report in its income statement for the first year ended December $31$

$($ignore taxes$)?$

Note: Use tables, Excel, or a financial calculator. $($FV of $$1,$ PV of $$1,$ FVA of $$1,$ PVA of $$1,$ FVAD of $$1$ and PVAD of $$1)$

Complete this question by entering your answers in the tabs below.

Required A

Required C

Determine the price at which the lessor is "selling" the asset $($present value of the lease payments$).$

Note: Round your answers to nearest whole number and round percentage answer to $1$ decimal place.