Blossom Steel Corporation, as lessee, signed a lease agreement for equipment for five years, beginning January 31, 2020. Annual rental payments of $40,000 are to be made at the beginning of each lease year (January 31). The insurance and repairs and maintenance costs are the lessee's obligation. The interest rate used by the lessor in setting the payment schedule is 9%; Blossom's incremental borrowing rate is 10%. Blossom is unaware of the rate being used by the lessor. At the end of the lease, Blossom has the option to buy the equipment for $3,000, which is considerably below its estimated fair value at that time. The equipment has an estimated useful life of seven years with no residual value. Blossom uses straight-line depreciation on similar equipment that it owns, and follows IFRS 16. Click here to view the factor table PRESENT VALUE OF 1. Click here to view the factor table PRESENT VALUE OF AN ANNUITY DUE.\fTable A.5 PRESENT VALUE OF AN ANNUITY DUE OF 1 PVF-AD. -1+ (1+) (n) periods 2% 3% 5% 6% 8% 9% 10% 11% 12%% 15% 1,00000 1.00000 1.00000 1.00000 1.00000 1.00900 1.00000 1,00090 1.00000 1,00000 1:00000 1.00000 1.98039 1.97561 1.97087 1.96154 1.95238 1.94340 1.92593 1.91743 1.90909 1.90090 1 89286 1 86957 2.94156 2.92742 2.91347 2 68609 2.85941 2.83339 2.78326 2.75911 2.73554 2.71252 2.69005 2.62571 3.88388 3.85602 3.82851 3.77509 3.72325 3.67301 3.57710 3.53130 3.48685 3.44371 3.40183 3.28323 4.80773 4.76197 4.71710 4.62940 4.54595 4.46511 4.31213 4.23972 4.16986 4,10245 403735 3.85498 DONO 5.71346 5.64583 5.57971 5.45182 5.32948 5.21236 4.99271 4.88965 4.79079 4.69590 4.60478 4.35216 6.60143 6.50813 6.41719 6.24214 6.07569 5.91732 5.62288 5.48592 5 35526 5.23054 5.11141 4.78448 7.47199 7.34939 7 23028 7.00205 6.78537 6.58238 6.20637 6.03295 5.86842 5.71220 5.56376 5.16042 8.32548 8.17014 8.01969 7.73274 7.46321 7.20979 6.74664 6.53482 6 33493 6.14612 5.96764 5.48732 10 9.16224 8.97087 8.78611 8.43533 8.10782 7.80169 7.24689 6.99525 6.75902 6.53705 6.32825 5.77158 11 9.98259 9.75206 9.53020 9.11090 8,72173 8.36009 7.71008 7.41766 7.14457 6.88923 6.65022 6.01877 12 10.78685 10.51421 10.25262 9.76048 9.30641 8.84687 8.13896 7.80519 7.49506 7.20652 6.93770 6.23371 13 11.57534 11.25776 10.95400 10.38507 9.86325 9.38384 8.53608 8.16073 7.81369 7.49236 7.19437 6.42062 14 12.34837 11.98319 11.63496 10.98565 10.39357 9.85268 8.90378 8,48690 8.10336 7.74987 7.42355 6.58315 15 13.10625 12.69091 12 29607 11.56312 10.89864 10.29498 9.24424 8.78615 9.36669 7.98187 7.62817 6.72448 16 13.84926 13.38138 12.93794 12.11839 11.37966 10.71225 9.55948 9.06069 8 60608 8.19087 7.81086 6.84737 17 14.57771 14.05500 13.56110 12/65230 11.83777 11.10590 9.85137 9.31256 8 82371 8.37916 7.97399 6.95424 18 15.29187 14.71220 14.16612 2 13.16567 12.27407 11.47726 10.12164 9.54363 9.02155 8.54879 8.11963 7.04716 19 15.99203 15.35336 14.75351 13.65930 12.68959 11 82760 10.37189 9.75563 9.20141 8.70162 8.24967 7.12797 20 16.67846 15.97889 15.32380 14.13394 13.08532 12.15812 10.60360 9.95012 9.36492 8.83929 8 36578 7.19823 21 17,35143 16.58916 15.87747 14.59033 13,46221 12 46992 10.81815 10.12855 9.51356 8.96333 8 46944 7.25933 22 18.01121 17.18455 16.41502 15.02916 13.82115 12.76408 11.01680 10.29224 9.64869 9.07507 8.56200 7.31246 23 18.65805 17.76541 16.93692 15.45112 14.16300 13.04158 11.20074 10.44243 9.77154 9.17574 8.64465 7.35866 24 19.29220 18.33211 17 44361 15 85684 14.46857 13.30338 11.37106 10.58021 9 88322 9.26643 8.71843 7.39884 25 19.91393 18.88499 17.93554 16.24696 14.79864 13.55036 11.52876 10.70661 9.98474 9.34814 8.78432 7.43377 26 20.52346 19.42438 18.41315 16.62208 15.09394 13.78336 11.67478 10.82258 10.07704 9.42174 8.84314 7.46415 27 21.12104 19.95061 18.87684 16.98277 15.37519 14/00317 11.80998 10.92897 10.16095 9.48806 8 89566 7.49056 28 21.70690 20.46401 19.32703 17 32959 15.64303 14.21053 11.93518 11.02658 10.23722 9.54780 8.94255 7.51353 29 20.96489 19.76411 17 66306 15.89813 14.40616 12.05108 11.11613 10.30657 9.60162 8.98442 7.53351 30 22.28127 22.84438 21.45355 20.18845 17.98371 16.14107 14.59072 12.15841 11.19828 10.36961 9.65011 9.02181 7 17.55084 31 23.39646 21.93029 20.60044 18 29203 16.37245 14.76483 12.25778 11.27365 10.42691 9.69379 9.05518 7.56598 32 23.93770 22.39541 21.00043 18 58849 16.59281 81 14.92909 12.34980 11.34280 10.47901 9.73315 9.08499 7.57911 33 24.46833 22.84918 21 38877 18.87355 16.80268 15.08404 12.43500 11.40624 10 52638 9.76860 9.11159 7.59053 34 24.98856 23.29188 21.76579 19.14765 17.00255 15.23023 12.51389 11.46444 10.56943 9.80054 9.13535 7.60046 35 25.49859 23.72379 22 13184 19.41120 17.19290 15.36814 12.58693 11.51784 10.60858 9.82932 9.15656 7.60910 36 25.99862 24.14516 22 48722 19.56461 17.37419 15.49825 12.65457 11.56682 10.64416 9.85524 9.17550 7.61661 37 5 19.90828 17.54685 15.62099 12.71719 11.61176 10.67651 9.87859 9.19241 7.62314 38 26.48884 24.55625 22 83225 26.96945 5 24.95732 23.16724 20.14258 8 17.71129 15.73678 12.77518 11.65299 10.70592 9.89963 9.20751 7.62882 39 40 27.44064 4 25.34860 23.49246 20.36786 17.86789 15.84602 12.82887 11.69082 10.73265 9.91859 9 22099 7.63375 27.90259 25.73034 23.80822 20.58448 18.01704 15.94907 12.87858 11.72552 10.75697 9.93567 9 23303 7.63805Using time value of money tables, a financial calculator, or Excel functions, calculate the PV of the lease obligation. (Round factor values to 5 decimal places, e.g. 1.25124 and final answer to O decimal places, e.g. 5,275.) Present value $Prepare the lease amortization schedule for the lease. (Hint: You may find the ROUND formula helpful for rounding in Excel.) (Round answers to O decimal places, e.g. 5,275.) Blossom Steel Corporation (Lessee) Lease Amortization Schedule (Annuity Due Basis) Annual Interest Reduction Bal Lease on Unpaid of Lease of L Date Payment Liability Liability Lial 1/31/20 $ 1/31/20 LA $ 1/31/21 1/31/22 1/31/23 1/31/24 1/31/25Prepare the journal entry that should be recorded on January 31, 2020, by Blossom. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Round factor values to 5 decimal places, e.g. 1.25124 and final answers to O decimal places, e.g. 5,275.) Date Account Titles and Explanation Debit Credit Jan. 31, 2020 (To record inception of lease and first lease payment.)Prepare any necessary adjusting journal entries at December 31, 2020, and the journal entry or entries that should be recorded on January 31, 2021, by Blossom. Blossom does not use reversing entries. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter O for the amounts. Round answers to O decimal places, e.g. 5,275.) Date Account Titles and Explanation Debit Credit Dec. 31 2020 (To record depreciation expense.) Dec. 31, 2020 (To record interest.) Jan. 31, 2021 (To record lease payment.)During year XXX XXX XXX (To record payment of insurance and repairs.)Prepare any necessary adjusting journal entries at December 31, 2021, and the journal entry or entries that should be recorded on January 31, 2022, by Blossom. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter O for the amounts. Round answers to O decimal places, e.g. 5,275.) Date Account Titles and Explanation Debit Credit Dec. 31, 2021 (To record depreciation expense.) Dec. 31, 2021 (To record interest.) Jan. 31, 2022 (To record lease payment.)What amounts would appear on Blossom's December 31, 2021 SFP relative to the lease arrangement? {Round answers to 0 decimal places, as. 5.275.) Blossom Steel Corporation Statement of Financial Position $ $ $ Assume that the leased equipment had a fair value of $200,000 at the inception of the lease, and that no bargain purchase option is available at the end of the lease. Would your treatment of the lease change for financial reporting purposes? The lease would be accounted as a