On January 1, 2017, Bonduris Company leases warehouse space in Oakland, CA. The lease is for six years with payments to be made at the beginning of each year. The lease calls for Bonduris to pay $15,000 on January 1, 2017. The lease calls for subsequent rent payments to increase 10% per year. For example, the January 1, 2018 payment will be $16,500, and the January 1, 2019 payment will be $18,150. Bonduris has adopted early ASC 842 and has appropriately classified the lease as an operating lease. Bonduris has a calendar reporting year and an incremental borrowing rate of 7%. Bonduris uses straight-line amortization for its long-lived assets. Ignore current and non currrent classification for this exercise. Use tables (PV of 1, PVAD of 1, and PVOA of 1) (Use the appropriate factor(s) from the tables provided.) Required: 1. What journal entries should Bonduris make at January 1, 2017, to record the effects of the lease? 2. Prepare Bonduris's amortization table for the leased warehouse. 3. What is the balance of the lease liability on January 1, 2018, after Bonduris makes the rent payment? 4. What is the balance of the right-of-use asset on January 1, 2018, after Bonduris makes the rent payment? Req 1 Req 2 Req 3 and 4 What journal entries should Bonduris make at January 1, 2017, to record the effects of the lease? (If no entry is required for a particular transaction, select "No journal entry required" in the first account field. Round your intermediate calculations and final answers to 2 decimal places.) View transaction list Journal entry worksheet 1 2 Prepare the entry necessary at the start of the lease. Note: Enter debits before credits. Transaction General Journal Debit Credit 1 Req 1 Req 2 Req 3 and 4 What journal entries should Bonduris make at January 1, 2017, to record the effects of the lease? (If no entry is required for a particular transaction, select "No journal entry required" in the first account field. Round your intermediate calculations and final answers to 2 decimal places.) View transaction list Journal entry worksheet Prepare the entry for the first lease payment. Note: Enter debits before credits. Transaction General Journal Debit Credit 2 Req 1 Req 2 Req 3 and 4 Prepare Bonduris's amortization table for the leased warehouse. (Round your intermediate calculations and final answers to 2 decimal places.) Date Total Payment Interest Expense Principal Reduction Balance 1/1/2017 1/1/2017 1/1/2018 1/1/2019 1/1/2020 1/1/2021 1/1/2022 Total $ 0.00 $ 0.00 $ 0.00 Req 1 Req 2 Req 3 and 4 3. What is the balance of the lease liability on January 1, 2018, after Bonduris makes the rent payment? (Round your intermediate calculations and final answers to 2 decimal places.) 4. What is the balance of the right-of-use asset on January 1, 2018, after Bonduris makes the rent payment? (Round your intermediate calculations and final answers to 2 decimal places.) Show less Balance of lease liability on January 1, 2018 Balance of right-of-use asset on January 1, 2018