On January 1, 2014, A&O Corp. leases equipment to PVP Company under a six-year non-cancelable lease agreement. The fair value of the equipment is $700,000 and the cost of equipment to A&O is $600,000. Economic life of the leased equipment is ten years with no residual value and title to the equipment passes to PVP at the end of the lease. Equal annual payments of 151,421 are due on December 31 each year. The implicit interest rate is 8%. Collectibility of the lease payments is reasonably predictable and there are no additional costs yet to be incurred by A&O Corp. Assume that this is a sales type lease. The present value factor for an ordinary annuity for 6 periods at 8% is 4.62288 and the present value factor for an annuity due for 6 periods at 8% is 4.99271.

For A&O Co. (lessor) answer the following questions.

a. Show calculations for Lease Receivable on 1/1/2014 (round your answer).

b. Prepare the journal entry to record the lease on 1/1/ 2014.

c. Prepare a partial amortization table for the lease through 12/31/2016.

d. Prepare the journal entry to record the receipt of lease payment on 12/31/2014.