In the worksheet "lease amortization schedule", you will find information about a three$-$

year lease initiated on Jan. $1,$ Year $1.$ This lease calls for quarterly payments of $$30,000$ at

the beginning of each quarter, starting from Jan. $1,$ Year $1.$ The market interest rate at the

time of issuance is $12\%.$ Please calculate the present value of lease payments and

complete the amortization schedule. Put in the correct formulas, not just the numbers.

Based on the Amortization Schedule, please answer the following question. Using the formulas.

Q$1$: what is the lessee's lease expense in Y $1$ if this is an operating lease?

Q$2$: what is the lessee's interest expense in Y $1$ if this is an operating lease?

Q$3$: what is the lessee's amortization expense related to the right$-$of$-$use assets in Y $1$ if this is an operating

lease?

Q$4$: what is the lessee's amortization expense related to the right$-$of$-$use assets in Y $3$ if this is an operating

lease?

Q$5$: Prepare the journal entry for the lessor on $01/01/$Y$1$ if this is an operating lease.

Q$6$: Prepare the journal entry for the lessor on $04/01/Y2$ if this is an operating lease $($no need to record

depreciation expense which would be recorded as an adjusting entry at fiscal period end$).$

Q$7$: Prepare the journal entry for the lessor on $04/01/$Y$2$ if this is a sales$-$type lease.

Sensitivity Analysis

Q$8.$ The quarterly lease payments is $$7,000$ and the effective interest rate is $9\%$

Q$9.$ The quarterly lease payments is $$24,000$ and the effective interest rate is $12\%.$