Amal Leasing (Lessor) Co. signs a lease agreement on January 1, 2019, to lease electronic equipment to Rashad (Lessee) Co. The term of the non-cancelable lease is 5 years and the useful life is 6 years. The annual payments are $31,717.56 and are required at the beginning of each year. The equipment has a cost of $120,000 and a fair value of $160,000 to ALHaram Leasing. AL Haram Leasing desires to earn a return of 4% on its investment and the collectability of the payment by Rashad is probable. The lease amortization schedule is as follows:

Date	Annual Lease payment	Interest (4%) on lease receivable	Reduction of Lease Receivable	Lease Receivable
1/1/2019				160,000
1/1/2019	31,717.56	-	31,717.56	128,282.74
1/1/2020	31,717.56	5,131.3	26,586.25	101,696.49

Instructions

1. Prepare ALAmal ' journal entries to (5 marks)

a. Record the Finance lease on January 1, 2019.

b. Record the receipt of the first payment on January 1, 2019.

b. Record the accrued interest on December 31, 2019.