For this question$-$assume that as an inducement to enter an operating lease, a lessor

granted a lessee twelve months of free rent under a six year operating lease. The lease

was effective on $\frac{1}{1}\frac{?}{23}$ and provides for monthly rental payments to begin on $\frac{1}{1}\frac{?}{2024}.$ The

lessee made the first rental payment of $$100,000$ on $\frac{12}{31}\frac{?}{23}.$ In the $2023$ income

statement, the Lessor should report lease revenue in the amount equal to: $(2).$

A$.120,000$

B$.100,000$

C$.83,333$

D$.$ None

Show work for full credit.

Part $2$: $(6)$ Based upon the information included in the table below relating to Lease A $($a

financing$/$sales type lease$),$ determine the lease payments, the initial ROU$-$Asset$/$Lease Liability

amount recorded by the Lessee, and the initial Lease receivable recorded by the Lessor.

Lessee borrowing rate: $9\%$

Lessor's rate of return $($known to the lessee: $8\%P^{-PV}(65K0\mathrm{.}58349)$

Lease term $($years$)$: $7,n=7$

Fair value of underlying asset: $$580,000.$

Expected residual value: $$65,000.$

Guaranteed residual value by lessee: $$80,000.\frac{533320\mathrm{.}8}{5\mathrm{.}62288}=94848\mathrm{.}3339r$