American Food Services, Inc. leased a packaging machine from Barton and Barton Corporation. Barton and Barton completed construction of the machine on January 1, 2021. The lease agreement for the $5.5 million (fair value and present value of the lease payments) machine specified four equal payments at the end of each year. The useful life of the machine was expected to be five years with no residual value. Barton and Bartons implicit interest rate was 11%. (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: 1. Prepare the journal entry for American Food Services at the beginning of the lease on January 1, 2021. 2. Prepare an amortization schedule for the four-year term of the lease. 3. & 4. Prepare the appropriate entries related to the lease on December 31, 2021 and 2023.

No	Date	General Journal	Debit	Credit
1	January 01, 2021	Right-of-use assetselected answer correct	5,500,000selected answer correct
		Lease payableselected answer correct		5,500,000

Prepare an amortization schedule for the four-year term of the lease. (Enter your answers in whole dollars and not in millions. Round your answers to the nearest whole dollar. Enter all amounts as positive values.)

Lease Amortization Schedule
Year	Lease Payments	Effective Interest	Decrease in Balance	Outstanding Balance
				5,500,000selected answer correct
2021	1,735,092selected answer incorrect
2022
2023
2024
Total	1,735,092	0	0

repare the appropriate entries related to the lease on December 31, 2021 and 2023. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Enter your answers in whole dollars and not in millions. Round your intermediate and final answers to the nearest whole dollar.)