calculate Interest on unpaid obligation and balance of capital lease obligation

1. The lease term is 4 years. The lease is noncancelable and requires annual rental payments of $20,000 to be paid in advance at the beginning of each year. 2. The cost, and also fair value, of the heavy equipment to Scott at the inception of the lease is $68,036.62. The equipment has an estimated life of 4 years and has a zero estimated residual value at the end of this time. 3. Adden agrees to pay all executory costs. 4. The lease contains no renewal or bargain purchase option. 5, Scott's interest rate implicit in the lease is 12%. Adden is aware of this rate, which is equal to its borrowing rate. 6. Adden uses the straight-line method to record depreciation on similar equipment. 7. Executory costs paid at the end of the year by Adden are: 2016 Insurance, $1,500 Property taxes, $6,000 2017 Insurance, $1,300 Property taxes, $5,500 Interest at 12% on Unpaid Obligation Balance of Capital Lease Obligation Annual Lease Date Payment January 1, 2016:Before the initial payment January 1,2016 December 31,2016 January 1,2017 December 31,2017 January 1,2018 December 31,2018 January 1,2019 2 3 $20,000.00 4 5 20,000.00 6 20,000.00 7 8 9 20,000.00