American Food Services, Inc., leased a packaging machine from Barton and Barton Corporation. Barton and Barton completed construction of the machine on January 1, 2016. The lease agreement for the $4.5 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 four years with no residual value. Barton and Barton's implicit interest rate was 8% (also American Food Services' incremental borrowing rate). (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 inception of the lease on January 1, 2016. (If no entry is required for a particular transaction, select "No journal entry required" in the first account field.) Answer is complete and correct. No Date General Journal Debit Credit 1 January (Leased assets 4,50 Lease payable 4,50 2. Prepare an amortization schedule for the four-year term of the lease. Answer is not complete. Lease Amortization Schedule Lease Effective Decrease in Payments Interest Balance Year Outstandi Balance 4,500, 2016 2017 2018 1,358,65 X 1,358,65 X 1,358,655 360,00 998,656 280,106 1,078,54 X 193,82 X 1,164,83 X 2,422,7 1,257, 3.Prepare the journal entry for the first lease payment on December 31, 2016. (If no entry is required for a particular transaction, select "No journal entry required" in the first account field.) X Answer is complete but not entirely correct. No Date General Journal Debit Credit 1 Decembe interest expense 360, Lease payable 998, Cash 1,35X