E15-22 A lease agreement for equipment requires Granger Transport Ltd. to make 10 annual payments of $40,000, with the first payment due on January 2, 2020, the date of the inception of the lease. Required 1. Journalize the following lessee transactions assuming that it is a capital lease: 2020 Jan. 2 Beginning of lease term and first annual payment. The present value of the nine future lease payments at 10 percent is $230,381. Dec. 31 Amortization of equipment (10 percent). 31 Interest expense on lease liability. 2021 2021 Jan. 2 Second annual lease payment. 2. Assume now that this is an operating lease. Journalize the January 2, 2020, lease payment. 7 Journalizing capital lease and operating lease transactions 2. Dec. 31, 2020, amortization expense, $ 27,036