On 1/1/16, R-U Ready leased a car with a FMV of $45,000 for 5 years with a commitment to make 5 annual payments of $8,000 with the first payment due immediately and the remaining payments due on 12/31 of each year. R-U readys incremental borrowing rate is 12%. The estimated life of the car is 10 years. The car ownership does not transfer to R-U Ready at the end of the lease and there is no bargain purchase option.

Requirement: Present the accounts and dollar amounts that would appear on comparative balance sheets and income statements for the years ending 12/31/16 and 12/31/15.