Oakridge Leasing Corporation signs an agreement on January 1, 2020, to lease equipment to Crane Limited. Oakridge and Crane follow ASPE. The following information relates to the agreement. 1. The term of the non-cancellable lease is five years, with no renewal option. The equipment has an estimated economic life of six years. 2. The asset's fair value at January 1, 2020, is $85,000. 3. The asset will revert to the lessor at the end of the lease term, at which time the asset is expected to have a residual value of $6,800, which is not guaranteed. 4. Crane Limited assumes direct responsibility for all executory costs, which include the following annual amounts: $900 to Rocky Mountain Insurance Ltd. for insurance and $1,610 to James Township for property taxes. 5. The agreement requires equal annual rental payments of $19,006 to Oakridge, the lessor, beginning on January 1, 2020. 6. The lessee's incremental borrowing rate is 10%. The lessor's implicit rate is 9% and is known to the lessee. 7. Crane Limited uses the straight-line depreciation method for all equipment. 8. Crane uses reversing entries when appropriate. Click here to view the factor table PRESENT VALUE OF 1. Click here to view the factor table PRESENT VALUE OF AN ANNUITY DUE. Calculate the PV of the future minimum lease payments using any of the following methods: (1) factor tables, (2) a financial calculator, or (3) Excel functions. (Round factor values to 5 decimal places, e.g. 1.25124 and final answers to O decimal places, e.g. 1,452.) Present value $ Prepare an amortization schedule for Crane Limited for the lease term. (Hint: You may find the ROUND formula helpful for rounding in Excel.) (Round factor values to 5 decimal places, e.g. 1.25124 and final answers to O decimal places, e.g. 1,452.) Crane Limited (Lessee) Balance of Lease Obligation Lease Amortization Schedule Annual Lease Date Payment 1/1/20 Interest on Unpaid Obligation Reduction of Lease Obligation $ 1/1/20 $ 1/1/21 1/1/22 1/1/23 1/1/24 $ $ $ $ Prepare all of Crane's journal entries for 2020 and 2021 to record the lease agreement, the lease payments, and all expenses related to this lease. Assume that the lessee's annual accounting period ends on December 31 and that Crane uses reversing entries. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter O for the amounts. Round answers to O decimal places, e.g. 5,275.) Date Account Titles and Explanation 1/1/20 During 2020 (To record inception of lease and first lease payment.) During 2020 (To record payment of insurance.) (To record payment of property taxes.) Debit Credit 12/31/20 12/31/20 (To record interest.) 1/1/21 (To record depreciation expense.) 1/1/21 (To record interest accrual reversing entry.) (To record lease payment.) || || || | || During 2021 (To record payment of insurance.) Dec. 31, 2021 (To record payment of property taxes.) 12/31/21 (To record interest.) (To record depreciation expense.) Show the dollar amounts that Oakridge, the lessor, used to arrive at the lease payment amount of $19,006. (Round factor values to 5 decimal places, e.g. 1.25124 and final answers to O decimal places, e.g. 5,275.) Fair market value of leased asset to lessor $ Less: PV of unguaranteed residual value Amount to be recovered through lease payments $ Five periodic lease payments. $