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Lease Term (in years) quarterly rental payments (paid at the beginning of each quarter) Effective interest rate Present value of lease payments Prepare the

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Lease Term (in years) quarterly rental payments (paid at the beginning of each quarter) Effective interest rate Present value of lease payments Prepare the lease amortization schedule. Payment Date 01/01/Y1 04/01/Y1 07/01/Y1 10/01/Y1 01/01/Y2 04/01/Y2 07/01/Y2 10/01/Y2 01/01/Y3 04/01/Y3 07/01/Y3 10/01/Y3 total 3 $30,000 12% Sensitivity Analysis Lease lease balance at balance These are on the second page of the excel file 01/01/Y2 at 07/01/Y3 (after the (after the lease payment) lease payment) Lease Payments Effective Decrease in Lease Interest Balance Balance the quarterly lease payments is $7,000 and the effective interest rate is 9% the quarterly lease payments is $24,000 and the effective interest rate is 12% Based on the amortization schedule, please answer the following questions. Q1: what is the lessee's lease expense in Y1 if this is an operating lease? Q2: what is the lessee's interest expense in Y1 if this is an operating lease? Q3: what is the lessee's amortization expense related to the right-of-use assets in Y1 if this is an operating lease? Q4: what is the lessee's amortization expense related to the right-of-use assets in Y3 if this is an operating lease? Q5: Prepare the journal entry for the lessor on 01/01/Y1 if this is an operating lease. Q6: 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). Q7: Prepare the journal entry for the lessor on 04/01/Y2 if this is a sales-type lease.

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