Finance Lease (Calculator set on BEG). On January 1st, 2019 Asphalt Paving Co leased a road-paving machine from ABC Equipment for 6 years. Payments under the lease were $187,635.68, with the first due upon signing of the lease on January 1, 2019, and the remainder due on December 31, 2019, and the following 4 years. The equipment had a sales price of $1,000,000 and an estimated useful life of 6 years. The interest rate implicit in the lease is 5%.

a. Calculate the present value of future lease payments

b. Why does this arrangement qualify as a Finance lease?

c. Prepare the first three lines of the amortization table that would be used by the lessee

d. Record all journal entries related to this lease for Asphalt Paving for 2019 and 2020