On December 31, 20X0, the Hamilton Building Maintenance Services acquired cleaning equipment on a capital lease for three annual lease payments of $41,000 each on December 31, 20X1, 20X2, and 20X3. The implicit interest rate was 20% compounded annually. (Click the icon to view the Future Value of $1 table.) (Click the icon to view the Present Value of $1 table.) (Click the icon to view the Present Value of Ordinary Annuity of $1 table.) Requirements 1. Compute the present value of the capital lease. 2. Prepare journal entries at the inception of the lease on December 31, 20X0, and for each of the 3 years. Distinguish between the short and long-term classifications of the lease liability. Requirement 1. Compute the present value of the capital lease. (Round your answer to the nearest whole dollar.) The present value of the capital lease is $ Requirement 2. Prepare journal entries at the inception of the lease on December 31, 20X0, and for each of the 3 years. Distinguish between the short and long-term classifications of the lease liability. (Round your answers to the nearest whole dollar. Record debits first, then credits. Explanations are not required.) Begin by preparing the schedule of lease payments for each of the 3 years. (For amounts with a $0 balance, make sure to enter "0" in the appropriate cell.) Begin by preparing the schedule of lease payments for each of the 3 years. (For amounts with a $0 balance, make sure to enter "0" in the appropriate cell.) (1) (3) (5) (2) (4) Lease Liability Interest Cash for End of at Beginning Year of Year Expense per Year Capital Lease (3)-(2) Reduction in Lease Liability Payment Lease Liability at End of Year 20X0 20X1 20X2 20X3 Next, prepare the journal entry at the inception of the lease on December 31, 20X0. Distinguish between the short and long-term classifications of the lease liability. Date Dec. 31, 20X0 Accounts Debit Credit Prepare the journal entries for 20X1. Start with the journal entry to record the amortization for the leased asset on December 31, 20X1. Date Dec. 31, 20X1 Accounts Debit Credit Now prepare the journal entry to record the lease payment on December 31, 20X1. Review the schedule of lease payments you prepared above. Date Dec. 31, 20X1 Accounts Debit Credit Prepare the journal entry to reclassify short and long-term portions of the lease liability on December 31, 20X1. Review the schedule of lease payments you prepared above. Date Dec. 31, 20X1 Accounts Debit Credit Prepare the journal entries for 20X2. Start with the journal entry to record the amortization for the leased asset on December 31, 20X2. Date Dec. 31, 20X2 Accounts Debit Now prepare the journal entry to record the lease payment on December 31, 20X2. Review the schedule of lease payments you prepared above. Date Accounts Credit Debit Credit Now prepare the journal entry to reclassify short and long-term portions of the lease liability on December 31, 20X2. Review the schedule of lease payments you prepared above. Date Dec. 31, 20X2 Accounts Debit Credit Prepare the journal entries for 20X3. Start with the journal entry to record the amortization for the leased asset on December 31, 20X3. Start with the journal entry to record the amortization for the leased asset on December 31, 20X3. Date Dec. 31, 20X3 Accounts Debit Finally, prepare the journal entry to record the lease payment on December 31, 20X3. Review the schedule of lease payments you prepared above. Date Dec. 31, 20X3 Accounts Credit Debit Credit Future Value of $1 FV = (1 + I)" Periods 3% 4% 5% 6% 7% 8% 10% 12% 14% 16% 18% 20% 22% 2 1 1.0300 1.0400 1.0500 1.0600 1.0700 1.0800 1.1000 1.1200 1.1400 1.1600 1.1800 1.2000 1.2200 1.1 2 1.0609 1.0816 1.1025 1.1236 1.1449 3 1.0927 1.1249 1.1576 1.1910 1.2250 1.1664 1.2100 1.2597 1.3310 1.2544 1.4049 1.2996 1.3456 1.3924 1.4400 1.4884 1. 45678 1.1255 1.1699 1.2155 1.2625 1.3108 1.1593 1.2167 1.2763 1.3382 1.4026 1.1941 1.2653 1.3401 1.4185 1.5007 1.2299 1.3159 1.4071 1.5036 1.6058 1.2668 1.3686 1.4775 1.5938 1.7182 9 1.3048 1.4233 1.5513 1.6895 1.8385 1.3605 1.4641 1.4693 1.6105 1.7623 1.4815 1.5609 1.5735 1.6890 1.8106 1.9254 1.6430 1.7280 1.8158 1.9 1.9388 2.0736 2.2153 2.3 2.1003 2.2878 2.4883 2.7027 2.9 1.5869 1.7716 1.9738 2.1950 2.4364 2.6996 2.9860 3.2973 3. 1.7138 1.9487 2.2107 2.5023 2.8262 3.1855 3.5832 4.0227 4. 1.8509 2.1436 2.4760 2.8526 3.2784 3.7589 4.2998 4.9077 5. 1.9990 2.3579 10 1.3439 1.4802 1.6289 1.7908 1.9672 2.1589 2.5937 11 1.3842 1.5395 1.7103 1.8983 2.1049 2.3316 2.8531 12 1.4258 1.6010 1.7959 2.0122 2.2522 2.5182 3.1384 13 1.4685 1.6651 1.8856 2.1329 2.4098 2.7196 3.4523 14 1.5126 1.7317 1.9799 2.2609 2.5785 2.9372 3.7975 15 1.5580 1.8009 2.0789 2.3966 2.7590 3.1722 4.1772 16 1.6047 1.8730 2.1829 2.5404 2.9522 17 1.6528 1.9479 2.2920 2.6928 3.1588 3.4259 4.5950 3.7000 5.0545 2.7731 3.2519 3.8030 3.1058 3.7072 4.4114 5.2338 6.1917 7.3046 8. 3.4785 4.2262 5.1173 6.1759 7.4301 8.9117 10. 3.8960 4.8179 5.9360 7.2876 8.9161 10.8722 13.1 4.3635 5.4924 6.8858 8.5994 10.6993 13.2641 16. 4.8871 6.2613 7.9875 10.1472 12.8392 16.1822 20.3 5.4736 7.1379 9.2655 11.9737 15.4070 19.7423 25.1 6.1304 8.1372 10.7480 14.1290 18.4884 24.0856 31.1 6.8660 9.2765 12.4677 16.6722 22.1861 29.3844 38.1 4.4355 5.1598 5.9874 6.9 Present Value of $1 1 PV (1 + 1)" Periods 3% 4% 5% 6% 7% 8% 10% 12% 14% 16% 18% 20% 22% 24% 25% 123456789 .9709 .9615 .9524 .9434 .9346 .9426 .9246 .9070 .8900 .9151 .8890 .8638 .8396 .8885 .8626 .8219 .8548 .8227 .7835 .7921 .7473 .8375 .7903 .7462 .7050 .7894 .7664 .8131 .7599 .7307 .7107 .6651 .7026 10 .7441 .6756 .6446 .6139 .6768 .6274 .5919 .5584 11 .7224 .6496 .5847 5268 12 .7014 .6246 .5568 .4970 .4440 .9259 .8734 .8573 .8163 .7938 .7629 .7350 .7130 .6806 .6663 .6302 .6227 .5835 .5820 .5403 .5439 .5002 .5083 .4632 .4751 .4289 .3971 13 .6810 .6006 .5303 .4688 .4150 14 .6611 .5775 .5051 .4423 .3878 15 .6419 .5553 .4810 .4173 .3624 .3152 .2394 16 .6232 .5339 4581 17 .6050 .5134 18 .5874 4936 .4155 .3936 .4363 .3714 3503 .3387 .3166 .2919 .2176 .2703 .1978 .1456 2959 2502 .1799 .1300 .0946 .9091 .8929 .8772 .8621 .8475 .8264 .7972 .7695 .7432 .7182 .6944 .7513 .7118 .6750 .6407 .6086 .5787 .5507 .6830 .6355 .5921 .5523 .5158 .4823 .4514 .4230 .6209 .5674 .5194 .4761 .4371 .4019 .3700 .3411 .3277 .5645 .5066 .4556 .4104 .3704 .3349 .3033 .2751 .2621 .5132 .4523 .3996 .3538 .3139 .2791 .2486 .2218 .2097 .4665 .4039 .3506 .3050 .2660 .2326 .2038 .1789 .1678 .4241 .3606 .3075 .2630 .2255 .1938 .1670 .1443 .1342 .3855 .3220 .2697 .2267 .1911 .1615 .1369 .1164 .1074 .3505 .2875 .2366 .1954 .1619 .1346 .1122 .0938 .0859 .3186 .2567 .2076 .1685 .1372 .1122 .0920 .0757 .0687 .3677 .2897 .2292 .1821 .1452 .1163 .0935 .0754 .0610 .0550 .3405 .2633 .2046 .1597 .1252 .0985 .0779 .0618 .0492 .1827 .1401 .1079 .0835 .0649 .0507 .0397 .0352 .1631 .1229 .0930 .0708 .0541 .0415 .0320 .0281 .1078 .0802 .0600 .0451 .0340 .0258 .0225 .0691 .0508 .0376 .8333 .8197 .8065 .8000 .6719 .6504 .6400 .5245 .5120 .4096 .0440 .0279 .0208 .0180 Present Value of Ordinary Annuity of $1 1 PVA- (1+1)" Periods 3% 4% 5% 6% 7% 8% 10% 12% 14% 16% 18% 20% 22% 24% 1234 .9709 5 10 68810 5.2421 5.0757 7 6.2303 6.0021 5.7864 7.0197 6.7327 6.4632 .9615 1.9135 1.8861 1.8594 1.8334 2.8286 2.7751 2.7232 2.6730 3.7171 3.6299 3.5460 3.4651 4.5797 4.4518 4.3295 4.2124 5.4172 4.9173 5.5824 6.2098 .9524 .9434 9 7.7861 7.4353 7.1078 8.5302 8.1109 11 9.2526 8.7605 12 9.9540 9.3851 13 10.6350 9.9856 14 15 16 6.8017 7.3601 7.8869 8.3838 9.3936 8.8527 11.2961 10.5631 9.8986 9.2950 11.9379 11.1184 10.3797 9.7122 12.5611 11.6523 11.6523 10.8378 10.1059 7.7217 8.3064 8.8633 17 13.1661 12.1657 11.2741 10.4773 9.7632 .9346 .9259 .9091 .8929 .8772 .8621 1.8080 1.7833 1.7355 1.6901 1.6467 1.6052 2.6243 2.5771 2.4869 2.4018 2.3216 2.2459 3.3872 3.3121 3.1699 3.0373 2.9137 2.7982 4.1002 3.9927 3.7908 3.6048 3.4331 3.2743 4.7665 4.6229 4.3553 4.1114 3.8887 3.6847 5.3893 5.2064 4.8684 4.5638 4.2883 4.0386 5.9713 5.7466 5.3349 4.9676 4.6389 4.3436 6.5152 6.2469 5.7590 5.3282 4.9464 4.6065 7.0236 6.7101 6.1446 5.6502 5.2161 4.8332 7.4987 7.1390 6.4951 5.9377 5.4527 5.0286 7.9427 7.5361 6.8137 6.1944 5.6603 5.6603 5.1971 8.3577 7.9038 7.1034 6.4235 8.7455 8.2442 7.3677 6.6282 9.1079 8.5595 7.6061 6.8109 9.4466 8.8514 7.8237 6.9740 9.1216 8.0216 7.1196 5.8424 5.3423 6.0021 5.4675 6.1422 6.1422 5.5755 6.2651 5.6685 6.3729 5.7487 .8475 .8333 .8197 .8065 1.5656 1.5278 1.4915 1.4568 2.1743 2.1065 2.0422 1.9813 2.6901 2.5887 2.4936 2.4043 3.1272 2.9906 2.8636 2.7454 3.4976 3.3255 3.1669 3.0205 3.8115 3.6046 3.4155 3.2423 4.0776 3.8372 3.6193 3.4212 4.3030 4.0310 3.7863 3.5655 4.4941 4.1925 3.9232 3.6819 4.6560 4.3271 4.0354 3.7757 4.7932 4.4392 4.1274 3.8514 4.9095 4.5327 4.2028 3.9124 5.0081 4.6106 4.2646 3.9616 5.0916 4.6755 4.3152 4.0013 5.1624 4.7296 4.3567 4.0333 5.2223 4.7746 4.3908 4.0591