IBM leases equipment to Sharon Swander Company. The non-cancelable term is 6 years beginning January 20X1, with equal rental payments of $38,737 at the beginning of each year. Executory costs of $1,000 are not included in the lease payment. The lease does not contain a bargain purchase option but DOES transfer title at the end of the lease term. The equipment has a useful life of 7 years. The lessees incremental borrowing rate is 10%, and the lessors implicit interest rate 8% is not known to the lessee.

a.) What is the amount of the Right-of-Use Asset capitalized?

b.) What is the amount of the fiscal year 20X2 interest expense?

c.) What is the fiscal year 20X1 lease liability balance?

d.) What is the amount of amortization expense for fiscal year 20X1?

e.) What is the fiscal year 20X1 Right-of-Use Asset balance?

f.) What is Swanders total expense associated with lease for 20X1?

g.) What is the fiscal year 20X2 lease liability balance?