Exercise 15-2 Finance lease; calculate lease payments [LO15-2] American Food Services, Inc., leased a packaging machine from Barton and Barton Corporation. Barton and Barton completed construction of the machine on January 1, 2018. The lease agreement for the $5.0 million (fair value and present value of the lease payments) machine specified four equal payments at the end of each year. The useful life of the machine was expected to be four years with no residual value. Barton and Barton's implicit interest rate was 10%. (FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1) (Use appropriate factor(s) from the tables provided.) Required: 1. Prepare the journal entry for American Food Services at the beginning of the lease on January 1, 2018. 2. Prepare an amortization schedule for the four-year term of the lease. 3. & 4. Prepare the appropriate entries related to the lease on December 31, 2018 and 2020. Complete this question by entering your answers in the tabs below. Req 1 Req 2 Req 3 and 4 Prepare the journal entry for American Food Services at the beginning of the lease on January 1, 2018. (If no entry is required for a particular transaction, select "No journal entry required" in the first account field. Enter your answers in whole dollars and not in millions.) No Date General Journal Debit Credit 1. X 5,000,000 January 01, 2018 Lease expense Lease payable 5,000,000 Req 1 Req 2 > Complete this question by entering your answers in the tabs below. Req 1 Reg 2 Req 3 and 4 Prepare an amortization schedule for the four-year term of the lease. (Enter your answers in whole dollars and not in millions. Round your answers to nearest whole dollar. Enter all amounts as positive values.) Lease Amortization Schedule Effective Decrease in Interest Balance Lease Payments Year Outstanding Balance 5,000,000 3,422,648 2018 1,577,352 X 1,577,352 1,577,352 500,000 500,000 2019 2020 2021 Total 3,154,704 1,000,000 0 000 1,577,352 Req 1 Req 2 Req 3 and 4 Prepare the appropriate entries related to the lease on December 31, 2018 and 2020. (Enter your answers in whole dollars and not in millions. Round your intermediate and final answers to nearest whole dollar. If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) No Date General Journal Debit Credit 1 December 31, 201 Interest expense Lease payable Cash 2 December 31, 201 Amortization expense Right-of-use asset 3 December 31, 202 Interest expense Lease payable Cash 4. December 31, 202 Amortization expense Right-of-use asset