On December 31, 2021, Rhone-Metro Industries leased equipment to Western Soya Co. for a four-year period ending December 31, 2025, at which time possession of the leased asset will revert back to Rhone-Metro. The equipment cost Rhone-Metro $468,317 and has an expected useful life of six years. Its normal sales price is $468,317. The lessee-guaranteed residual value at December 31, 2025, is $22,000. Equal payments under the lease are $130,000 and are due on December 31 of each year. The first payment was made on December 31, 2021. Western Soya's incremental borrowing rate is 12%. Western Soya knows the interest rate implicit in the lease payments is 10%. Both companies use straight-line depreciation. Use (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. Show how Rhone-Metro calculated the $130,000 annual lease payments. 2. How should this lease be classified (a) by Western Soya Co. (the lessee) and (b) by Rhone-Metro Industries (the lessor)? 3. Prepare the appropriate entries for both Western Soya Co. and Rhone-Metro on December 31, 2021. 4. Prepare an amortization schedule(s) describing the pattern of interest over the lease term for the lessee and the lessor. 5. Prepare all appropriate entries for both Western Soya and Rhone-Metro on December 31, 2022 (the second lease payment and amortization). 6. Prepare the appropriate entries for both Western Soya and Rhone-Metro on December 31, 2025 assuming the equipment is returned to Rhone-Metro and the actual residual value on that date is $1,000. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Required 3 Required 4 Required 4 Required 5 Required 5 Required 6 Required 6 lessee lessor lessee lessor lessee lessor lessee lessor Prepare all appropriate entries for Western Soya on December 31, 2022 (the second lease payment and amortization). (If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Round your answers to nearest whole dollar.) View transaction list View journal entry worksheet No Date General Journal 1 December 31, 2022 Lease payable 2 December 31, 2022 Interest expense Cash Amortization expense Right-of-use asset Debit Credit 130,000 Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Required 3 Required 4 lessee lessor lessee Required 4 Required 5 Required 5 Required 6 Required 6 lessor lessee lessor lessee lessor Prepare all appropriate entries for Western Soya on December 31, 2022 (the second lease payment and amortization). (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) View transaction list View journal entry worksheet No Date General Journal 1 December 31, 2022 Cash Lease receivable Interest revenue Debit Credit 130,000 Required 1 Required 2 Required 3 Required 3 Required 4 Required 4 Required 5 Required 5 Required 6 Required 6 lessee lessor lessee lessor lessee lessor lessee lessor Prepare the appropriate entries for both Western Soya on December 31, 2025 assuming the equipment is returned to Rhone-Metro and the actual residual value on that date is $1,000. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) Debit Credit View transaction list View journal entry worksheet No Date General Journal 1 December 31, 2025 Amortization expense Right-of-use asset 2 December 31, 2025 Loss on residual value guarantee Cash Required 1 Required 2 Required 3 Required 3 Required 4 Required 4 Required 5 Required 5 Required 6 Required 6 lessee lessor lessee lessor lessee lessor lessee lessor Prepare the appropriate entries for Rhone-Metro on December 31, 2025 assuming the equipment is returned to Rhone-Metro and the actual residual value on that date is $1,000. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) View transaction list View journal entry worksheet No Date General Journal 1 December 31, 2025 Cash Equipment Lease receivable Interest revenue Debit Credit