On December 31, 2021, Yard Art Landscaping leased a delivery truck from Branch Motors. Branch paid $38,000 for the truck. Its retail value is $64,980. The lease agreement specified annual payments of $19,000 beginning December 31, 2021, the beginning of the lease, and at each December 31 through 2024. Branch Motors' interest rate for determining payments was 11%. At the end of the four-year lease term (December 31, 2025) 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 $4,000. Yard Art's incremental borrowing rate is 11% and is unaware of Branch's implicit rate. A $3,000 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 $19,000 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 $19,000 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, 2021. 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, 2022. 10. Prepare the appropriate entries for both Yard Art and Branch Motors on December 31, 2024 (the final lease payment). 11. Prepare the appropriate entries for both Yard Art and Branch Motors on December 31, 2025 (the end of the lease term), assuming the truck is returned to the lessor and the actual residual value of the truck was $2,000 on that date. Req 1 to 3 and 5 Req 4 Req6 Req 7 Req 8 Req 9 Req 10 Req 11 Prepare the appropriate entries for both Yard Art and Branch Motors on December 31, 2021. (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) View transaction list View journal entry worksheet No General Journal Debit Credit Date December 31, 2021 1 55,099 Right-of-use asset Lease payable 55,099 N December 31, 2021 16,000 Lease payable Prepaid maintenance expense Cash 3,000 19,000 3 December 31, 2021 Lease receivable Cost of goods sold Sales revenue Equipment December 31, 2021 19,000 Cash Maintenance fee payable Lease receivable 3,000 16,000 Req 1 to 3 and 5 Req 4 Req 6 Req 7 Req 8 Req 9 Req 10 Req 11 Prepare an amortization schedule that describes the pattern of interest expense over the lease term for Yard Art. (Round your intermediate and final answers to nearest whole dollar. Enter all amounts as positive values.) Lessee's Amortization Schedule Payments Effective Decrease in Interest Balance December 31 Outstanding Balance $ 55,099 39,099 $ $ 16,000 2021 2022 2023 2024 16,000 16,000 16,000 $ 48,000 $ 0 $ 16,000 Req 1 to 3 and 5 Req 4 Reg 6 Reg 7 Req 8 Req9 Req 10 Req 11 Prepare an amortization schedule that describes the pattern of interest revenue over the lease term for Branch Motors. (Round your intermediate and final answers to nearest whole dollar. Enter all amounts as positive values.) Lessor's Amortization Schedule Effective Decrease in Payments Interest Balance December 31 Outstanding Balance 2021 2022 2023 2024 2025 $ 0 $ 0 $ 0 Req 1 to 3 and 5 Reg 4 Reg 6 Req 7 Req 8 Req9 Req 10 Reg 11 Prepare the appropriate entries for both Yard Art and Branch Motors on December 31, 2022. (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 neares whole dollar.) View transaction list X 1 Record the maintenance expense for Yard Art. > 2 Record the lease payment for Yard Art. 3 Record amortization of the right-of-use asset for Yard Art. 4 Record the cash received on lease by Branch Motors. Credit Req 1 to 3 and 5 Reg 4 Reg 6 Req 7 Reg 8 Req 9 Req 10 Req 11 Prepare the appropriate entries for both Yard Art and Branch Motors on December 31, 2024 (the final lease payment). (If required for a transaction/event, select "No journal entry required" in the first account field. Round your intermediate and to nearest whole dollar.) View transaction list X 1 Record the maintenance expense for Yard Art. 2 Record the lease payment for Yard Art. 3 Record amortization of the right-of-use asset for Yard Art. 4 Record the cash received on lease by Branch Motors. Credit Req 1 to 3 and 5 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, 2025 (the end of the lease term), assuming the truck is returned to the lessor and the actual residual value of the truck was $2,000 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 View transaction list x 1 Record the maintenance expense for Yard Art. > 2 Record amortization of the right-of-use asset for Yard Art. 3 Record the last payment on lease for Yard Art. 4 Record the last cash receipt on lease and settlement of lease by Branch Motors. Credit