On 12/31/16, Hall Inc entered into a lease agreement with Oates Co. Hall leased a machine from Oates for 9 years. The estimated useful life of the machine is 9 years. At the end of the 9 year lease term, ownership of the machine will transfer back to Oates. The lease agreement calls for annual payments of $150,000, to begin on 12/31/16. The borrowing rate is 10%. The present value of the lease payments is $949,500. Show all computations..

1. Prepare a lease amortization table for 12/31/16 & 12/31/17.

2. Prepare journal entries for Hall (lessee finance lease) for 12/31/16 & 12/31/17.