I will provide a problem related to "lease" in one of accounting class. I would like to know Where and how  do you get the $5,458 and the $54,542 

 

When lease agreement includes a Purchase Option .Example &:On January 1, 2024, Sans Serif Publishers leased printing equipment from First LeaseCorp. * First LeaseCorp purchased the equipment from CompuDec Corporation at a cost of$479.079. The lease agreement specifies six annual payments of $92.931 beginningJanuary 1, 2024, the beginning of the lease, and on each December 31 from 2024 through2028. * On December 31, 2029, at the end of the six-year lease term, the equipment is expectedto be worth $75,000, and Sans Serif has the option to purchase it for $60.000 on thatdate. * The residual value after seven years is zero. * The interest rate in these financing arrangements is 10%. In addition to the annual lease payments, the lessor also receives 60,000 on December 31, 2029,when the lessee exercises the purchase option. So, the total value of the lease for the lessee andlessor 1s: PVAD =92,931 0O4.79079 = 445 211 PV = 60,000 00.56447 = 33,868 January 1, 2024Sans Serif (Lessee)Right-of-use asset$479,079Lease payable479,079First LeaseCorp (Lessor)Lease receivable (PV of lease payments plus $60,000)$479.079Equipment$479,079Another point is that the lessee amortizes the right-of-use asset based on useful life of the assetnot the lease term.Each December 31 over the life of the assetSans Serif (Lessee)Amortization expense ($479,079 + 7)$68,440Right-of-use asset68,440When purchase option is exercised on December 31, 2029:December 31, 2029Sans Serif (Lessee)Interest expense (10% 0$54,542)$5,458Lease payable54,542Cash60,000First LeaseCorp (Lessor)Cash (exercise price)$60,000Lease receivable$54,542Lease revenue5,458