At January 1, 2023, Widget World Corporation leased manufacturing equipment from Clinton Corporation under a 6-year lease agreement. The lease agreement specifies annual payments of $25,000 beginning January 1, 2023, the beginning of the lease, and on each December 31 thereafter through 2030. The equipment was acquired recently by Clinton at a cost of $146,163 (its fair value) and was expected to have a useful life of 8 years with no salvage value at the end of its life. Because the lease term is only 6 years, the asset does have an expected residual value at the end of the lease term of $28,000. Clinton seeks a 7% return on its lease investments. By this arrangement, the lease is deemed to be a finance lease. Lease date Annual lease payments Lease term Useful life of equipment Residual value at end of lease term Clinton's implicit interest rate 1. Determine the present value of the lease using Excel's PV function. January 1, 2023 $25,000 6 years 8 years $28,000 7% 2. Prepare the journal entry for Widget World Corporation at the beginning of the lease on January 1, 2023. Date January 1, 2023 General Journal 3. Prepare a partial amortization schedule for the first year of the lease. Debit Credit 3. Prepare a partial amortization schedule for the first year of the lease. Date January 1, 2023 December 31, 2023 Lease Payments Effective Interest Decrease in Balance Outstanding Balance 4. Record the first lease payment on January 1, 2023. Date January 1, 2023 General Journal 0 5. Record the amortization of the right-of-use asset on December 31, 2023. Date December 31, 2023 General Journal Debit Credit Debit Credit 6. Indicate the amounts related to the lease reported on the year-end balance sheets and income statements. Date Balance Sheet Amounts Right-of-Use Lease Liability Asset Income Statement Amounts Interest Expense Amortization Expense December 31, 2023 0 0