On December 31, 2024, Rhone-Metro Industries leased equipment to Western Soya Company for a four-year period ending December 31, 2028, at which time possession of the leased asset will revert back to Rhone-Metro. The equipment cost Rhone-Metro $610,523 and has an expected useful life of six years. Its normal sales price is $610,523. The lessee-guaranteed residual value on December 31, 2028, is $26,000. Equal payments under the lease are $170,000 and are due on December 31 of each year. The first payment was made on December 31, 2024. Western Soya's incremental borrowing rate is 13%. Western Soya knows the interest rate implicit in the lease payments is 10%. Both companies use straight-line depreciation or amortization. Note: Use Excel, or a financial calculator. Required: 1. Show how Rhone-Metro calculated the $170,000 annual lease payments. 2. How should this lease be classified (a) by Western Soya Company (the lessee) and (b) by Rhone-Metro Industries (the lessor)? 3. Prepare the appropriate entries for Western Soya Company on December 31, 2024. 4. Prepare an amortization schedule describing the pattern of interest over the lease term for the lessee. 5. Prepare all appropriate entries for Western Soya on December 31, 2025 (the second lease payment and amortization). 6. Prepare the appropriate entries for Western Soya on December 31, 2028, assuming the equipment is returned to Rhone-Metro and the actual residual value on that date is $1,200. Required 1 Required 2 Required 3 Lessee Required 4 Required 5 Lessee Lessee Required 1 Required 2 Required 6 Lessee Required 3 Required 4 Lessee Lessee Required 5 Required 6 Lessee Lessee Show how Rhone-Metro calculated the $170,000 annual lease payments. Guaranteed Residual Value Table or calculator function: Amount to be recovered Amount to be recovered through periodic lease payments Lease Payments Table or calculator function: n = Present Value Lease Payments Lease payments at the beginning of each of the next four years Required 1 Required 2 Required 3 Required 4 Required 5 Lessee Lessee Lessee Required 6 Lessee How should this lease be classified (a) by Western Soya Company (the lessee) and (b) by Rhone-Metro Industries (the lessor)? Western Soya Company Rhone-Metro Industries Required 1 Required 2 Required 3 Lessee Required 4 Lessee Required 5 Lessee Required 6 Lessee Prepare an amortization schedule(s) describing the pattern of interest over the lease term for the lessee. Note: Round your intermediate and final answers to nearest whole dollar. Enter all amounts as positive values. Lease Amortization Schedule December 31 Payments Effective Interest Decrease in Balance Outstanding Balance 2024 2026 2027 Required 1 Required 2 Required 3 Required 4 Required S Required 6 Prepare all appropriate entries for Western Soya on December 31, 2025 (the second lease payment and amortization). Note: If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Round you and final answers to nearest whole dollar. View transaction list Journal entry worksheet Record the cash payment. Note: Enter debits before credits. Date December 31, 2025 General Journal Credit Prepare the appropriate entries for Western Saya Company on December 31, 2024. Note: If no entry is required for a transaction/event, select "No journal entry required" in the first Required 1 View transaction list Journal entry worksheet Required 2 Required 3 Required 4 Lessee Lessee Required 5 Lessee Required 6 Lessee Prepare the appropriate entries for Western Soya on December 31, 2028 assuming the equipment is returned to Rhone-Metro and the actual residual value on that date is $1,200. Note: 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 Record the lease. 2 Note: Enter debits before credits. Date December 31, 2024 View transaction list Journal entry worksheet Record amortization expense. General Journal Debit Credit Note: Enter debits before credits. General Journal Credit Required 1 Required 2 Required 3 Required 4 Lessee Lessee Required 5 Lessee Required 6 Lessee December 31, 2026 Required 1 Required 2 Required 3 Lessee Required 4 Required 5 Lessee Required 6 Lessee Lessee Prepare the appropriate entries for Western Soya Company on December 31, 2024. Note: If no entry is required for a transaction/event, select "No journal entry required" in the first a actual residual value on that date is $1,200. View transaction list Prepare the appropriate entries for Western Soye on December 31, 2028 assuming the equipment is returned to Rhone-Metro and the Note: 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. Journal entry worksheet 2 Record the cash payment. Note: Enter debits before credits. Date December 31, 2024 General Journal Debit Credit View transaction list Journal entry worksheet < Record the end of the lease. Note: Enter debits before credits. Date December 31, 2028 General Journal Debit Credi