On December 1, year 1, Gold Star Leasing Company leases equipment to Brick Co. with 5 equal annual payments of $80,000 each, payable beginning December 1, year 1. Brick Co. agrees to guarantee the $10,000 residual value of the asset at the end of the lease term. Brick's incremental borrowing rate is 10%, however it knows that Gold Star's implicit interest rate is 8%. Show supporting computations. Round to the nearest dollar. PV of Annuity Due PV of Ordinary Annuity PV of Single Sum 3.99271 0.68508 3.79079 0.62092 8%, 5 periods 4.31213 10%, 5 periods 4.16986 How much amortization expense will Brick Co. report in its income statement for the year ended December 31, year 1? SHOW YOUR WORK

On December 1, year 1, Gold Star Leasing Company leases equipment to Brick Co. with 5 equal annual payments of $80,000 each, payable beginning December 1 , year 1 . Brick Co. agrees to guarantee the $10,000 residual value of the asset at the end of the lease term. Brick's incremental borrowing rate is 10%, however it knows that Gold Star's implicit interest rate is 8%. Show supporting computations. Round to the nearest dollar. How much amortization expense will Brick Co, report in its income statement for the year ended December 31 , year 1 ? SHOW YOUR WORK