Bidwell Leasing purchased a single-engine plane for its fair value of $771,147 and leased it to Red Baron Flying Club on January 1, 2021 (EV 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.) Terms of the lease agreement and related facts were: a. Eight annual payments of $135,000 beginning January 1, 2021, the beginning of the lease, and at each December 31 through 2027 Red Baron knows that Bidwell Leasing's implicit interest rate was 11%. The estimated useful life of the plane is eight years. Payments were calculated as follows: Amount to be recovered (fair value) Lease payments at the beginning of each of the next eight yearst (5771,147 5.7122) 5771,147 $135,000 *Present value of an annuity due of $1: n.8.1 -11% b. Red Baron's incremental borrowing rate is 12%. c. Incremental Costs of negotiating and consummating the completed lease transaction incurred by Bidwell Leasing were $21,091 Required: 1. How should this lease be classified (a) by Bidwell Leasing the lessor) and (b) by Red Baron (the lessee)? 2. Prepare the appropriate entries for both Red Baron Flying Club and Bidwell Leasing on January 1, 2021 3. Prepare an amortization schedule that describes the pattern of interest expense over the lease term for Red Baron Flying Club 4. Determine the effective rate of interest for Bidwell Leasing for the purpose of recognizing interest revenue over the lease term 5. Prepare an amortization schedule that describes the pattern of interest revenue over the lease term for Bidwell Leasing 6. Prepare the appropriate entries for both Red Baron and Bidwell Leasing on December 31, 2021(the second lease payment). Both companies use straight-line depreciation 7. Prepare the appropriate entries for both Red Baron and Bidwell Leasing on December 31, 2027 (the final lease payment). Answer is complete but not entirely correct. Check my work mode: This shows what is correct or incorrect for the work you have completed so far. It does not indicate com 5. Prepare an amortization schedule that describes the pattern of interest revenue over the lease term for Bidwell Leasing 6. Prepare the appropriate entries for both Red Baron and Bidwell Leasing on December 31, 2021 (the second lease payment). Both companies use straight-line depreciation 7. Prepare the appropriate entries for both Red Baron and Bidwell Leasing on December 31, 2027 (the final lease payment). Answer is complete but not entirely correct. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Required 4 Required 5 Required 6 Required 7 Prepare the appropriate entries for both Red Baron and Bidwell Leasing on December 31, 2021 (the second lease payment). Both companies use straight-line depreciation. (If no entry is required for a transaction/event, select "No journal entry required in the first account field. Round your intermediate and final answers to nearest whole dollar) No General Journal Credit 1 Dato December 31, 202 Lease payable Interest expense Cash Debit 69,976 65,024 O 135,000 2 December 31, 202 Amortization expense Right-of-use asset 96,393 96,393 3 135,000 December 31, 202 Cash Lease receivable Interest revenue 69,276 65,724 (Required 5 Required 7 ) 3. Prepare an amortization schedule that describes the pattern of interest expense over the lease term for Red Baron Flying Club 4. Determine the effective rate of interest for Bidwell Leasing for the purpose of recognizing interest revenue over the lease term. 5. Prepare an amortization schedule that describes the pattern of interest revenue over the lease term for Bidwell Leasing. 6. Prepare the appropriate entries for both Red Baron and Bidwell Leasing on December 31, 2021 (the second lease payment). Both companies use straight-line depreciation 7. Prepare the appropriate entries for both Red Baron and Bidwell Leasing on December 31, 2027 (the final lease payment). Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Required 4 Required Required 6 Required 7 Prepare an amortization schedule that describes the pattern of interest revenue over the lease term for Bidwell Leasing (Round your intermediate and final answers to nearest whole dollar. Enter all amounts as positive values.) Lease Amortization Schedule Date Payments Effective Decrease Outstanding Interest in Balance Balance $ 792,238 1/1/21 $ 135,000 $ or s 135,000 657,238 12/31/21 135,000 65,724 69,276 587,962 12/31/22 135,000 58,796 76,204 511,758 12/31/23 135,000 51,176 83,824 427,934 12/31/24 135,000 42,793 92,207 335,727 12/31/25 135,000 33,573 101 427 234,300 12/31/26 135,000 23.430 111,570 122,730 12/31/27 135,000 12,270 122,730 0 $ 1,080,000 $ 287,762 $ 792,238 Bidwell Leasing purchased a single-engine plane for its fair value of $771,147 and leased it to Red Baron Flying Club on January 1, 2021 (EV 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.) Terms of the lease agreement and related facts were: a. Eight annual payments of $135,000 beginning January 1, 2021, the beginning of the lease, and at each December 31 through 2027 Red Baron knows that Bidwell Leasing's implicit interest rate was 11%. The estimated useful life of the plane is eight years. Payments were calculated as follows: Amount to be recovered (fair value) Lease payments at the beginning of each of the next eight yearst (5771,147 5.7122) 5771,147 $135,000 *Present value of an annuity due of $1: n.8.1 -11% b. Red Baron's incremental borrowing rate is 12%. c. Incremental Costs of negotiating and consummating the completed lease transaction incurred by Bidwell Leasing were $21,091 Required: 1. How should this lease be classified (a) by Bidwell Leasing the lessor) and (b) by Red Baron (the lessee)? 2. Prepare the appropriate entries for both Red Baron Flying Club and Bidwell Leasing on January 1, 2021 3. Prepare an amortization schedule that describes the pattern of interest expense over the lease term for Red Baron Flying Club 4. Determine the effective rate of interest for Bidwell Leasing for the purpose of recognizing interest revenue over the lease term 5. Prepare an amortization schedule that describes the pattern of interest revenue over the lease term for Bidwell Leasing 6. Prepare the appropriate entries for both Red Baron and Bidwell Leasing on December 31, 2021(the second lease payment). Both companies use straight-line depreciation 7. Prepare the appropriate entries for both Red Baron and Bidwell Leasing on December 31, 2027 (the final lease payment). Answer is complete but not entirely correct. Check my work mode: This shows what is correct or incorrect for the work you have completed so far. It does not indicate com 5. Prepare an amortization schedule that describes the pattern of interest revenue over the lease term for Bidwell Leasing 6. Prepare the appropriate entries for both Red Baron and Bidwell Leasing on December 31, 2021 (the second lease payment). Both companies use straight-line depreciation 7. Prepare the appropriate entries for both Red Baron and Bidwell Leasing on December 31, 2027 (the final lease payment). Answer is complete but not entirely correct. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Required 4 Required 5 Required 6 Required 7 Prepare the appropriate entries for both Red Baron and Bidwell Leasing on December 31, 2021 (the second lease payment). Both companies use straight-line depreciation. (If no entry is required for a transaction/event, select "No journal entry required in the first account field. Round your intermediate and final answers to nearest whole dollar) No General Journal Credit 1 Dato December 31, 202 Lease payable Interest expense Cash Debit 69,976 65,024 O 135,000 2 December 31, 202 Amortization expense Right-of-use asset 96,393 96,393 3 135,000 December 31, 202 Cash Lease receivable Interest revenue 69,276 65,724 (Required 5 Required 7 ) 3. Prepare an amortization schedule that describes the pattern of interest expense over the lease term for Red Baron Flying Club 4. Determine the effective rate of interest for Bidwell Leasing for the purpose of recognizing interest revenue over the lease term. 5. Prepare an amortization schedule that describes the pattern of interest revenue over the lease term for Bidwell Leasing. 6. Prepare the appropriate entries for both Red Baron and Bidwell Leasing on December 31, 2021 (the second lease payment). Both companies use straight-line depreciation 7. Prepare the appropriate entries for both Red Baron and Bidwell Leasing on December 31, 2027 (the final lease payment). Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Required 4 Required Required 6 Required 7 Prepare an amortization schedule that describes the pattern of interest revenue over the lease term for Bidwell Leasing (Round your intermediate and final answers to nearest whole dollar. Enter all amounts as positive values.) Lease Amortization Schedule Date Payments Effective Decrease Outstanding Interest in Balance Balance $ 792,238 1/1/21 $ 135,000 $ or s 135,000 657,238 12/31/21 135,000 65,724 69,276 587,962 12/31/22 135,000 58,796 76,204 511,758 12/31/23 135,000 51,176 83,824 427,934 12/31/24 135,000 42,793 92,207 335,727 12/31/25 135,000 33,573 101 427 234,300 12/31/26 135,000 23.430 111,570 122,730 12/31/27 135,000 12,270 122,730 0 $ 1,080,000 $ 287,762 $ 792,238