Canvas Inc., who reports under ASPE, leases machinery on January 1, 2021, and records this as a capital lease. Seven annual lease payments of $ 140,000 are required the end of each year, starting December 31, 2021. The present value of the lease payments at 10% is $ 681,600. Title passes to Canvas at the end of the lease.

Canvas uses the effective interest method of amortization for the lease. The company uses straight-line depreciation over the equipment's expected useful life of eight years, with no residual value.

Instructions(Round values to the nearest dollar.)

a)Prepare lease amortization table for 2021 and 2022.

b)Prepare the general journal entries relating to this lease for 2021.