James Company specializes in leasing large storage units to other businesses. James entered a contract to lease a storage unit to Whiskey, Inc. for 4 years when that particular storage unit had a remaining useful life of 5 years. The fair value of the unit was $12,000 at the commencement of the lease on January 1, 2017. The present value of the five equal rental payments of $3,002 at the start of each year, plus the present value of a guaranteed residual value of $1,000, equals the fair value of $12,000, James implicit rate of return on the lease of 5%. The following is an incomplete amortization schedule. Date Lease Payment Interest (at 5%) Reduction of Lease Receivable Balance of Lease Receivable 1/1/17

$12,000 1/1/17

1/1/18

1/1/19

1/1/20

12/31/20

Totals

a. Complete the amortization schedule above.

b. Given the above schedule, make the appropriate entries at December 31, 2020, to record the accrual of interest and the return of the storage unit to James (assuming the unit is returned on December 31, 2020, at the expected and guaranteed residual value of $1,000). (hint: last interest amount and return of asset)