Ambrose Company has the option of purchasing a new delivery truck for $20,000 or leasing the truck for $4,067 per year, payable at the end of each year for six years. The truck also has a useful life of six years and will be depreciated on a straight-line basis with no salvage value. The interest rate used by the lessor to determine the annual payments was 6% See Table 65 Note: Use the appropriate factor by clicking on the Table link Required: a. Assume that Ambrose Company purchased the delivery truck and signed a six-year, 6% note payable for $20,000 in satisfaction of the purchase price. Prepare the horizontal model and the journal entry that Ambrose should make to recond the purchase transaction b. Assume instead that Ambrose Company agreed to the terms of the lease. Prepare the horizontal model and the journal entry that Ambrose should make to record the financing lease transaction. Hint First determine the present value of future lease payments) e. Prepare the horizontal model and record the journal entry that Ambrose Company should make at the end of the year to record the first annual lease payment of $4,067. (Hint Based on your answer to part b. determine the appropriate amounts for interest and principal) d. What expenses include amounts) should Ambrose Company recognize on the income statement for the first year of the lease? e. How much would the annual payments be for the note payable signed by Ambrose Company in Required A Hint Use the ink for present value Table Complete this question by entering your answers in the tabs below. Required A Required A2 Required B1 Required 82 Required CL Required C2 d Clack my work Assume that Ambrose Company purchased the delivery truck and signed a six-year, 6% note payable for $20,000 in satisfaction of the purchase ante. Prepare the oral model that 5 purchase transaction Note: Use amounts with for increases and amounts with- for decreases A Stockholder Equity Required 3> ulating the Present Value of $1 Number of Periods Discount Rate 2% 4% 6% 8% 10% 12% 14% 0.980 0.9615 16% 18% 0.9434 0.9259 20% 0.9091 0.8929 0.8772 2 0.8621 0.961 0.9246 0.8475 0.8900 0.8573 0.8333 0.8264 0.7972 0.7695 3 0.7432 0.7182 0.942 0.6944 0.8890 0.8396 0.7938 0.7513 0.7118 0.6750 0.6407 4 0.6086 0.924 0.8548 0.7921 0.5787 0.7350 0.6830 0.6355 0.5921 0.5523 5 0.906 0.8219 0.5158 0.4823 0.7473 0.6806 0.6209 0.5674 0.5194 6 04761 0.4371 0.888 0.7903 0.4019 0.7050 0.6302 0.5645 0.5066 0.4556 0.4104 0.3704 0.3349 7 0.871 0.7599 0.6651 0.5835 0.5132 0.4523 0.3996 0.3538 8 0.853 0.3139 0.2791 0.7307 0.6274 0.5403 0.4665 0.4039 10 90 0.3506 0.3050 0.2660 0.2326 0.837 0.7026 0.5919- 0.5002 04241 0.3606 0.3075 0.2630 0.2255 0.1938 0.820 0.6756 0.5584 04632 0.3855 0.3220 0.2697 0.2267 0.1911 0.1615 11 0.804 0.6496 0.5268 0.4289 0.3505 0.2875 0.2366 0.1954 0.1619 0.1346 12 0.788 0.6246 0.4970 0.3971 03186 0.2567 0.2076 0.1685 0.1372 0.1122 13 0.773 0,6006 0.4688 0.3677 0.2897 0.2292 0.1821 0.1452 0.1163 0.0935 14 0.758 0.5775 0.4423 0.3405 0.2633 0.2046 0.1597 0.1252 0.0985 0.0779 15 0.743 0.5553 0.4173 0.3152 0.2394 0.1827 0.1401 0,1079 0.0835 0.0649 16 0.728 0.5339 0.3936 0.2919 0.2176 0.1631 0.1229 0.0930 0.0708 0.0541 17 0.714 0.5134 0.3714 0.2703 0.1978 0.1456 0.1078 0.0802 0.0600 0.0451 18 0.700 0.4936 0.3503 0.2502 0.1799 0.1300 0.0946 0.0691 0.0508 0.0376 19 0.686 0.4746 0.3305 0.2317 0.1635 0.1161 0.0829 0.0596 0.0431 0.0313 20 0.673 0.4564 0.3118 0.2145 0.1486 0.1037 0.0728 0.0514 0.0365 0.0261 21 0.660 0.4388 0.2942 0.1987 0.1351 0.0926 0.0638 0.0443 0.0309 0.0217 22 0.647 0.4220 0.2775 0.1839 0.1228 0.0826 0.0560 0.0382 0.0262 0.0181 23 0.634 0.4057 0.2618 0.1703 0.1117 0.0738 0.0491 0.0329 0.0222 0.0151 24 0.622 0.3901 0.2470 0.1577 0.1015 0.0659 0.0431 0.0284 0.0188 0.0126 25 0.610 0.3751 0.2330 0.1460 0.0923 0.0588 0.0378 0.0245 0.0160 0.0105 30 0.552 0.3083 0.1741 0.0994 0.0573 0.0334 0.0196 0.0116 0.0070 0.0042 35 0.500 0.2534 0.1301 0.0676 0.0356 0.0189 0.0102 0.0055 0.0030 0.0017 40 0.453 0.2083 0.0972 0.0460 0.0221 0.0107 0.0053 0.0026 0.0013 0.0007 45 0.410 0.1712 0.0727 0.0313 0.0137 0.0061 0.0027 0.0013 0.0006 0.0003 50 0.372 0.1407 0.0543 0.0213 0.0085 0.0035 0.0014 0.0006 0.0003 0.0001 n.com/connect Production/bne/marshall 13e/table 5.htm Table 6-5: Factors for Calculating the Present Value of an Annuity of $1 Number of Periods 29 49 6% 0.980 09615 09434 Discount Rate 10% 09091 2 1942 18861 18334 3 2.884 2.7751 26730 8% 12% 14% 0.9259 08929 03772 1.7633 1.7355 16901 16467 25771 2.4569 16% 08621 1.6052 18% 20% 08475 08333 15656 15278 2.4018 23216 2.2459 4 2.1743 21065 330 36299 3.4651 3.3121 3.1699 30173 29137 2.7982 2.6901 2.5887 $ 4.713 4.4518 4.2124 3.9927 3.7908 36048 34331 32743 3.1272 29906 6 5601 5.2421 4.9173 7 6.473 60021 3.3824 " 7325 9 8.162 10 8.983 8.1109 11 9.387 7605 67327 62098 74353 63017 73601 3886 4.6229 4.3555 43114 5.2064 48684 5.7466 53349 49676 63400 $7590 5.3282 6.7101 6.1446 56502 7.1390 64951 36847 34976 4.5638 4.2883 46380 40386 4.3436 49464 33255 3A115 36046 4.0776 38372 4.5065 43030 40310 52161 48332 44941 41925 5.9377 54527 5.026 46560 4.3271 12 10.575 93851 3834 73361 68137 61944 5.6603 5.1971 47932 44392 13 11.34 99656 88527 7.9038 7.1034 64235 58424 5.3423 49095 45327 14 12.106 10.5631 9.2950 8.2442 73667 15 12.849 11.1184 9.7122 5595 76061 6.6282 6.8109 6.1422 60021 54675 5008 4.6106 53755 50916 4.6755 16 13578 116523 10.1059 83514 17 14.292 12.1657 10.4775 9.1216 IN 14.992 12.6593 10.8276 9.3719 80216 2014 19 15.678 13.1399 11.1581 9.6036 K3649 20 16.351 13.5903 11.4699 98181 85136 21 22 17.658 23 18.292 24 25 17.011 140292 11.7641 10.0168 8.6487 144511 12.0416 10.2007 8.7715 14.8568 123034 10.3711 88832 18.914 15.2470 12.5504 10.5288 39.523 78237 69740 6.2651 585 7.3196 63729 5.7487 72497 6.4674 58176 7.3658 65504 5.8775 74694 66231 59288 75620 6.6870 59731 76446 6.7429 60113 5.1624 4.7296 52223 4.7746 52732 48122 53162 4.8435 5.3527 4.8696 5.3837 4.3913 77184 89847 7.7843 6.7921 60442 6.8351 60726 54509 5.4099 49094 54321 49245 49371 156221 12.7834 10.6748 90770 78431 63729 60970 54669 4.9476 30 22.396 17.2920 13.7648 11.2578 94269 80552 70027 6.1772 5.3168 4.9789 38 24.999 18.6646 14.4982 11.6546 9.6442 8.1755 7.0700 6.2153 55380 49915 40 27 355 19.7928 15.0463 11.9246 9.7791 8.2438 45 29 490 50 31.424 20.7300 214822 15.4558 12.1084 9.8628 8.2825 15.7619 12.2335 99148 8.3045 7.1050 6.2335 55482 7.3232 6.2421 5.5523 7.1327 62463 55541 45966 49980