BUS 203 -Test IV SECTION 50 Points On January 1, 2016, Rider Inc. leased a truck to Pine Valley Transportation, The lease qualifies as a capital lease under criteria established by the accounting profession. The following information relates to this agreement 1. The lease term is for ten years. The useful life of the truck 15 2. that ownership of the asset be transferred to the lessee at the end of the lease term. 3. Lease payments are per year (exclusive of executory costs) with the first 4, payment due January 1, 2016. rate is 15%. The lessors implicit rate is 10% Pine Valley's and is known to Pine Valley the lessee. 5. Maintenance and other operating costs (executory costs), not included in the lease payments, are $1,500 and payable on June 1 of each year by Pine Valley. 6. Pine Valley uses straight-line depreciation on all its assets. (note: review GAAP depreciation for capital leases) appropriate. 7. Rider uses reversing journal entries where are as follows: 8. The present value factors for an annuity due 15% 5.77158 10% 6.75902 Instructions 1. Provide all necessary journal entries required of Pine Valley for the years 2016 and 2. Complete the lease amortization schedule below (up to 1/1/19) (round all answers to the nearest dollar) Lease Lease Interest Reduction Date Balance Payment