Current Attempt in Progress

Blossom Limited has signed a lease agreement with Crane Corp. to lease equipment with an expected lifespan of eight years, no

estimated salvage value, and a cost to Crane, the lessor of $$170,000.$ The terms of the lease are as follows:

The lease term begins on January $1,2022,$ and runs for $5$ years.

The lease requires payments of $$37,396$ at the beginning of each year starting January $1,2022.$

At the end of the lease term, the equipment is to be returned to the lessor.

Crane' implied interest rate is $5\%,$ while Blossom's borrowing rate is $6\%.$ Blossom uses straight$-$line depreciation for similar

equipment. The year$-$end for both companies is December $31.$

Assuming that both companies follow ASPE:

Click here to view the factor table PRESENT VALUE OF $1.$

Click here to view the factor table PRESENT VALUE OF AN ANNUITY DUE.

Determine the present value of the minimum lease payments. $($Round factor values to $5$ decimal places, e$.$g$.1\mathrm{.}25124$ and final answers

to $0$ decimal places, e$.$g$.5,275.)$

Present value

$1)$ prepare Blossom lease amortization schedule using effective interest method

$2)$ prepare the $2022$ j$/$e for Blossom