"I don't see that in my intermediate accounting text I saved from college."you grumble to a colleague in the accounting division of Dowell Chemical Corporation. This will take some research. Your comments pertain to the appropriate accounting treatment of a proposed sublease of warehouses Dowell has used for product storage Dowell leased the warehouses one year ago on December 31. The five-year lease agreement called for Dowell to make quarterly lease payments of $2.398,303. payable each December 31, March 31, June 30, and September 30, with the first payment at the lease's beginning As a finance lease, Dowell had recorded the right-of-use asset and liability at $40 million, the present value of the lease payments at 8% Dowell records amortization on a straight-ine basis at the end of each fiscal year. Today, Danielle Andries, Dowells controller, explained a proposal to sublease the underused warehouses to American Tankers, Inc. for the remaining four years of the lease term. American Tankers would be substituted as lessee under the original lease agreement As the new lessee, it would become the primary obligor under the agreement, and Dowell would not be secondarily liable for fulfilling the obligations under the lease agreement. Check on how we would need to account for this and get back to me." she had said. Required: 1. After the first full year under the warehouse lease. what is the balance in Dowell's lease liability? 2. After the first full year under the warehouse lease, what is the carrying amount (after accumulated amortization of Dowell's leased 3. Obtain the relevant authoritative literature on accounting for derecognition of finance leases by lessees using the FASB's Codification Research System You might gain access from the FASB website (www.asb.org), from your school library, or some other source. To determine the appropriate accounting treatment for the proposed sublease. what is the specific seven-digit codification citation (XXXXXXX) that Dowell would rely on to determine a, if the proposal will quality as a termination of a finance lease, and b. the appropriate accounting treatment for the sublease? 4. What, if any, journal entry would Dowell record in connection with the sublease? warehouses? Req 1 to 3 Reg 4 1. After the first full year under the warehouse lease, what is the balance in Dowell's lease liability? (Round your answers to the nearest whole dollar amount 2. After the first full year under the warehouse lease, what is the carrying amount (after accumulated amortization) of Dowell's leased warehouses? (Round your answers to the nearest whole dollar amount.) 3. Obtain the relevant authoritative literature on accounting for derecognition of finance leases by lessees using the FASB's Codification Research System. You might gain access from the FASB website (www.fasb.org), from your school library, or some other source. To determine the appropriate accounting treatment for the proposed sublease, what is the specific seven- digit Codification citation (XXX-XX-XX) that Dowell would rely on to determine: a. If the proposal will qualify as a termination of a finance lease, and b. the appropriate accounting treatment for the sublease Show less Dowell's lease ability Carrying amount of leased warehouses 2 50730 186.422 $ 32,000,000 Na 3-a Topic Subtopic Paragraph 840 Section 40 40 3-5 30 30 840 Req 4 > In the first account field. Enter your answers in whole dollars) View transaction list View journal entry worksheet . No Transaction Debit 1 Credit General Journal Lease payable Loss on sublease Accumulated amortization Right-of-use asset 30,816,422 1.183,578 8,000,000 40,000,000