On December 31, 2018, Yard Art Landscaping leased a delivery truck from Branch Motors. Branch paid $40,000 for the truck. Its retail value is $45,114. The lease agreement specified annual payments of $11,000 beginning December 31, 2018, the beginning of the lease, and at each December 31 through 2021. Branch Motors' interest rate for determining payments was 10%. At the end of the four-year lease term (December 31, 2022) the truck was expected to be worth $15,000. The estimated useful life of the truck is five years with no salvage value. Both companies use straight-line amortization or depreciation. Yard Art guaranteed a residual value of $6,000. Yard Art's incremental borrowing rate is 9% and is unaware of Branch's implicit rate. A $1,000 per year maintenance agreement was arranged for the truck with an outside service firm. As an expedient, Branch Motors agreed to pay this fee. It is, however, reflected in the $11,000 lease payments. (FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1) (Use appropriate factor(s) from the tables provided.) Required: 1. How should this lease be classified by Yard Art Landscaping (the lessee)? 2. Calculate the amount Yard Art Landscaping would record as a right-of-use asset and a lease liability. 3. How should this lease be classified by Branch Motors (the lessor)? 4. Show how Branch Motors calculated the $11,000 annual lease payments. 5. Calculate the amount Branch Motors would record as sales revenue. 6. Prepare the appropriate entries for both Yard Art and Branch Motors on December 31, 2018. 7. Prepare an amortization schedule that describes the pattern of interest expense over the lease term for Yard Art. 8. Prepare an amortization schedule that describes the pattern of interest revenue over the lease term for Branch Motors. 9. Prepare the appropriate entries for both Yard Art and Branch Motors on December 31, 2019. 10. Prepare the appropriate entries for both Yard Art and Branch Motors on December 31, 2021 (the final lease payment). 11. Prepare the appropriate entries for both Yard Art and Branch Motors on December 31, 2022 (the end of the lease term), assuming the truck is returned to the lessor and the actual residual value of the truck was $4,000 on that date. Answer is not complete. Answer is not complete. Complete this question by entering your answers in the tabs below. Req 1 to 3 and Req 4 Reg 6 Req 7 Req 8 Req 9 Req 10 Req 11 1. How should this lease be classified by Yard Art Landscaping the lessee)? 2. Calculate the amount Yard Art Landscaping would record as a right-of-use asset and a lease liability. 3. How should this lease be classified by Branch Motors (the lessor)? 5. Calculate the amount Branch Motors would record as sales revenue. (Round your intermediate and final answers to nearest whole dollar.) Show less 1. This lease should be classified by Yard Art as a 2. The amount that Yard Art would record as a right-of-use asset and a lease liability would be 3. This lease should be classified by Branch Motors as a 5. The amount that Branch Motors would record as sales revenue would Finance lease 43,094 Sales-type lease $ 43,095 be ( Req 1 to 3 and 5 Req 4 > Prepare the appropriate entries for both Yard Art and Branch Motors on December 31, 2018. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Round your intermediate and final answers to nearest whole dollar.) General Journal Credit No 1 Date December 31, 201 Right-of-use asset Lease payable Debit 39,564 39,564 X December 31, 201 Lease payable 10,000 1,000 Prepaid maintenance expense Cash 11,000 45,114 37,268 X December 31, 201 Lease receivable Cost of goods sold Sales revenue Equipment 42,382 X 40,000 4 11,000 December 31, 201 Cash Maintenance fee payable Lease receivable 1,000 10,000 Complete this question by entering your answers in the tabs below. Req 1 to 3 and Reg 1 to 3 and Reg4 Req6 Rego Req 7 Reg? Req 8 Reg 8 Reg 9 Reg9 Reg 10 Req 10 Req 11 Reg 11 Prepare the appropriate entries for both Yard Art and Branch Motors on December 31, 2019. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Round your intermediate and final answers to nearest whole dollar.) No Date General Journal Debit Credit Complete this question by entering your answers in the tabs below. Req 1 to 3 and Req 4 Reg 6 Req 7 Req 8 Reg 9 Req 10 Req 11 Prepare the appropriate entries for both Yard Art and Branch Motors on December 31, 2021 (the final lease payment). (If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Round your intermediate and final answers to nearest whole dollar.) No Date General Journal Debit Credit Req9 Req 11 > Answer is not complete. Complete this question by entering your answers in the tabs below. Reg 1 to 3 and Req 4 Reg 6 Req 7 Req 8 Req 9 Req 10 Req 11 Prepare the appropriate entries for both Yard Art and Branch Motors on December 31, 2022 (the end of the lease term), assuming the truck is returned to the lessor and the actual residual value of the truck was $4,000 on that date. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Round your intermediate and final answers to nearest whole dollar.) Show less A No Date General Journal Debit Credit