Ball Ltd. purchased land and constructed a service station, at a total cost of $ 450,000. On January 2, 2019, when construction was completed, Ball sold the service station and land to a major oil company for $ 500,000, and immediately leased it back from the oil company. Fair value of the land at the time of the sale was $ 50,000. The lease is a 10-year, non-cancellable lease. Ball uses straight-line amortization for its other assets. The economic life of the station is 15 years with zero residual value. Title to the property will revert back to Ball at the end of the lease. A partial amortization schedule for this lease follows:

Payments Interest_ Amortization Balance__

Jan 02, 2019 $ 500,000.00

Dec 31, 2019 $ 81,372.66 $ 50,000.00 $ 31,372.66 468,627.34

Dec 31, 2020 81,372.66 46,862.74 34,509.92 434,117.42

Dec 31, 2021 81,372.66 43,411.74 37,960.92 396,156.50

Instructions (Show calculations)

1. What is the interest rate implicit in the amortization schedule presented above?

2. What is the total lease-related expense recognized by the lessee during 2020? (rounded to the nearest dollar)

3. What is the amount of the lessee's obligation to the lessor after the December 31, 2021 payment? (Round to the nearest dollar.)

4. What is the total lease-related income recognized by the lessee during 2020?