d) Prepare the journal entries on the lessees books to reflect the signing of the lease agreement and to record the payments and expenses related to this lease for the years 2017 and 2018. Splishs annual accounting period ends on December 31. Reversing entries are used by Splish. (Credit account titles are automatically indented when amount is entered. Do not indent manually. Round present value factor calculations to 5 decimal places, e.g. 1.25124 and Round answers to 2 decimal places, e.g. 15.25.)

5/1/17

(d) Leased Equipment.....................

Lease Liability......................

Lease Liability..............................

Cash......................................

12/31/17

Interest Expense.........................

Interest Payable...................

Depreciation Expense...............

Accumulated Depreciation

Capital Leases.................

1/1/18

Interest Payable...........................

Interest Expense.................

5/1/18

Interest Expense.........................

Lease Liability..............................

Cash......................................

12/31/18

Interest Expense.........................

Interest Payable...................

12/31/18

Depreciation Expense...............

Accumulated Depreciation

Capital Leases.................

Factor Tables if needed

Exercise 21-8 (Part Level Submission) The following facts pertain to a noncancelable lease agreement between Novak Leasing Company and Splish Company, a lessee. Inception date Annual lease payment due at the beginning of May 1, 2017 each year, beginning with May 1, 2017 Bargain-purchase option price at end of lease term Lease ternm Economic life of leased equipment Lessor's cost Fair value of asset at May 1, 2017 Lessor's implicit rate Lessee's incremental borrowing rate $19,128.82 $3,600 5 years 10 years 58,000 $82,000 10% 10% The collectibility of the lease payments is reasonably predictable, and there are no important uncertainties surrounding the costs yet to be incurred by the lessor. The lessee assumes responsibility for all executory costs. The expected residual value of the equipment at the end of 5 (10) years is $12,000 (so) (c) Prepare a lease amortization schedule for Splish Company for the 5-year lease term. (Round present value factor calculations to 5 decimal places, e.g. 1.25126 and Round answers to 2 decimal places, e.g. 15.25.) SPLISH COMPANY (Lessee) Lease Amortization Schedule Interest on Annual Lease Payment PiusLiability Reduction of Lease Liabilit Date BPO Lease Liabilit 5/1/20 5/1/21 4/30/22 TABLE 6-5 PRESENT VALUE OF AN ANNUITY DUE OF 1 11% 12% 15% 2.62571 90909 2.71252 3.40183 3.85498 1.91743 2.75911 2.73554 3.57710 4.31213 3.44371 4.10245 4.23972 4.88965 5.48592 4.79079 5.35526 5.71220 5.967645.77158 4.60478 5.11141 4.35216 03295 6.74684 7.24689 6.14612 5.48732 6.75902 6.01877 6.88923 6.937706.42062 7.71008 8.13896 7.41766 7.80519 8.16073 8.368697749877.19437 623371 8.60608 8.82371 9.02155 7.49506 .49236 42355 2448 7.81369 8.10336 7.62817 8.19087 8.37916 8.54879 8.70162 7.81086 7.97399 8.11963 8.24967 8.36578 6.84737 9.31256 10.12164 10.37189 7.04716 7.12797 9.75563 9.95012 41 20 9.88322175748.56200 725933 7.46415 7.51353 7.53351 10.82258 10.16095 9.54780 98442 .55088 10.81815 11.01680 11.20074 11.37108. 2855 9.648699.17574.71843 743377 9.51356 .0750 8.64485 3884 10.29224 9.77154 10.58021 9.98474 9.34814 25 11.67478 9.42174 8.84314 28 10.92897 11.93518 12.05108 12.15841 10.23722 9.80162 9.85011 9.69379 11.27365 10.47901 9.768609.13535 7.60910 29 30 11.1 11613 9.02181 9.05518 31 12.34980 12.43500 12.51389 12.58693 10.56943 11.51784 35 10.608589.800549.11159 7.57911 9.82932813635 7.61661 15682 10.67651 9.8993 922099 7.63805 12 12.71719 12.77518 9.87859 9.19241 9.20751 7.62314 7.63375 12.87858 11.72552 10.75697 9.93567 TABLE 6-2 PRESENT VALUE OF 12% 92593 91743 86957 75614 79719 .77218 63552 56743 49718 63017 58349 54027 50025 .56447 .51316 48166 .50187 42241 35218 32197 28748 22917 42888 39711 31728 21494 31863 32618 23199 31524 27454 29189 27027 25025 23171 21763 19785 10687 14564 11611 17843 06110 19866 10067 07379 04017 12641 11597 08170 07361 08831 05974 04187 03738 01997 01737 01510 04849 .05731 06915 05210 04736 07889 03194 02878 .03914 06763 01894 00751 01691 01510 01348 01204 01075 05799 02674 02430 02210 02104 01896 01708 01538 00494 04971