Accounting 472 Fall 2020 Midterm #2 Key 10) On January 1, 2021 Big Lion Corporation leased equipment from Nittany Inc. for a 6-year period. The annual lease payment is $15,000. The prevailing interest rate is 7%. The first payment is due on January 1, 2021. All payments thereafter are made on December 31st of each year beginning with December 31, 2021. Assume the lease is accounted for as an Finance/Sales-Type Lease. Required: 1) What entry does Big Lion make on January 1, 2021 to record the lease and first lease payment? 2) What is the outstanding balance that Big Lion reports for the Right-of-Use Asset associated with this lease in its 2021 Balance Sheet (for the annual period ending December 31, 2021)? 3) What entry does Nittany Inc. make on January 1, 2021 to record the lease and receipt of the first lease payment? 4) What entry does Nittany Inc. make on December 31, 2021