On January 1, 2020, Wildhorse Leasing Inc., a lessor that uses IFRS 16, signed an agreement with Rock River Inc., a lessee, for the use of a compression system. The system cost $424,000 and Wildhorse purchased it from Manufacturing Solutions Ltd. specifically for Rock River Inc. Annual payments are made each January 1 by Rock River. In addition to making the lease payment, Rock River also reimburses Wildhorse $4,100 each January 1 for a portion of the repairs and maintenance expenditures, which cost Wildhorse Leasing a total of $6,100 per year. At the end of the 5-year agreement, the compression equipment will revert to Wildhorse and is expected to have a residual value of $25,200, which is not guaranteed. Collectibility of the rentals is reasonably predictable, and there are no important uncertainties surrounding the costs that have not yet been incurred by Wildhorse Leasing Inc. Click here to view the factor table PRESENT VALUE OF 1. Click here to view the factor table PRESENT VALUE OF AN ANNUITY DUE. Assume that Wildhorse Leasing Inc. has a required rate of return of 11%. Calculate the amount of the lease payments that would be needed to generate this return on the agreement if payments were made each: (Round factor values to 5 decimal places, e.g. 1.25124 and final answers to o decimal places, e.g. 5,275.) January 1 December 31 The lease payments TABLE PV.1 Present Value of 1 (n) periods 2% 212% 3% 4% 5% 6% 7% 8% 9% 10% 11% 12% 15% 1 0.98039 0.97561 0.97087 0.96156 0.95238 0.94340 0.93458 0.92593 0.91743 0.90909 0.90090 0.89286 0.86957 2 0.96117 0.95181 0.94260 0.92456 0.90703 0.89000 0.87344 0.85734 0.84168 0.82645 0.81162 0.79719 0.75614 3 0.94232 0.92860 0.91514 0.88900 0.86384 0.83962 0.81630 0.79383 0.77218 0.75132 0.73119 0.71178 0.65752 4 0.92385 0.90595 0.88849 0.85480 0.82270 0.79209 0.76290 0.73503 0.70843 0.68301 0.65873 0.63552 0.57175 5 0.90583 0.88385 0.86261 0.82193 0.78353 0.74726 0.71299 0.68058 0.64993 0.62092 0.59345 0.56743 0.49718 6 0.88797 0.86230 0.83748 0.79031 0.74622 0.70496 0.66634 0.63017 0.59627 0.56447 0.53464 0.50663 0.43233 7 0.87056 0.84127 0.81309 0.75992 0.71068 0.66506 0.62275 0.58349 0.54703 0.51316 0.48166 0.45235 0.37594 8 0.85349 0.82075 0.78941 0.73069 0.67684 0.62741 0.58201 0.54027 0.50187 0.46651 0.43393 0.40388 0.32690 9 0.83676 0.80073 0.76642 0.70259 0.64461 0.59190 0.54393 0.50025 0.46043 0.42410 0.39092 0.36061 0.28426 10 0.82035 0.78120 0.74409 0.67556 0.61391 0.55839 0.50835 0.46319 0.42241 0.38554 0.35218 0.32197 0.24719 11 0.80426 0.76214 0.72242 0.64958 0.58468 0.52679 0.47509 0.42888 0.38753 0.35049 0.31728 0.28748 0.21494 12 0.78849 0.74356 0.70138 0.62460 0.55684 0.49697 0.44401 0.39711 0.35554 0.31863 0.28584 0.25668 0.18691 13 0.77303 0.72542 0.68095 0.60057 0.53032 0.46884 0.41496 0.36770 0.32618 0.28966 0.25751 0.22917 0.16253 14 0.75788 0.70773 0.66112 0.57748 0.50507 0.44230 0.38782 0.34046 0.29925 0.26333 0.23199 0.20462 0.14133 15 0.74301 0.69047 0.64186 0.55526 0.48102 0.41727 0.36245 0.31524 0.27454 0.23939 0.20900 0.18270 0.12289 16 0.72845 0.67362 0.62317 0.53391 0.45811 0.39365 0.33873 0.29189 0.25187 0.21763 0.18829 0.16312 0.10687 PRESENT VALUE OF AN ANNUITY DUE OF 1 1 (1+i)-1 PVF-AD, = 1+ i (n) periods 2% 21/2% 3% 4% 6% 8% 9% 10% 11% 12% 15% 1 2 3 4 5 1.00000 1.98039 2.94156 3.88388 4.80773 1.00000 1.97561 2.92742 3.85602 4.76197 1.00000 1.97087 2.91347 3.82861 4.71710 1.00000 1.96154 2.88609 3.77509 4.62990 5% 1.00000 1.95238 2.85941 3.72325 4.54595 1.00000 1.94340 2.83339 3.67301 4.46511 1.00000 1.92593 2.78326 3.57710 4.31213 1.00000 1.91743 2.75911 3.53130 4.23972 1.00000 1.00000 1.00000 1.00000 1.90909 1.90090 1.89286 1.86957 2.73554 2.71252 2.69005 2.62571 3.48685 3.44371 3.40183 3.28323 4.16986 4.10245 4.03735 3.85498 6 7 8 9 10 5.71346 6.60143 7.47199 8.32548 9.16224 5.64583 6.50813 7.34939 8.17014 8.97087 5.57971 6.41719 7.23028 8.01969 8.78611 5.45182 5.32948 6.24214 6.07569 7.00205 6.78637 7.73274 7.46321 8.43533 8.10782 5.21236 5.91732 6.58238 7.20979 7.80169 4.99271 5.62288 6.20637 6.74664 7.24689 4.88965 5.48592 6.03295 6.53482 6.99525 4.79079 4.69590 4.60478 4.35216 5.35526 5.23054 5.11141 4.78448 5.86842 5.71220 5.56376 5.16042 6.33493 6.14612 5.96764 5.48732 6.75902 6.53705 6.32825 5.77158 11 12 13 14 15 9.98259 9.75206 10.78685 10.51421 11.57534 11.25776 12.34837 11.98319 13.10625 12.69091 9.53020 10.25262 10.95400 11.63496 12.29607 9.11090 8.72173 8.36009 9.76048 9.30641 8.88687 10.38507 9.86325 9.38384 10.98565 10.39357 9.85268 11.56312 10.89864 10.29498 7.71008 8.13896 8.53608 8.90378 9.24424 7.41766 7.80519 8.16073 8.48690 8.78615 7.14457 6.88923 6.65022 6.01877 7.49506 7.20652 6.93770 6.23371 7.81369 7.49236 7.19437 6.42062 8.10336 7.74987 7.42355 6.58315 9.36669 7.98187 7.62817 6.72448 16 17 18 19 20 13.84926 13.38138 12.93794 12.11839 11.37966 10.71225 9.55948 14.57771 14.05500 13.56110 12.65230 11.83777 11.10590 9.85137 15.29187 14.71220 14.16612 13.16567 12.27407 11.47726 10.12164 15.99203 15.35336 14.75351 13.65930 12.68959 11.82760 10.37189 16.67846 15.97889 15.32380 14.13394 13.08532 12.15812 10.60360 9.06069 9.31256 9.54363 9.75563 9.95012 8.60608 8.19087 7.81086 6.84737 8.82371 8.37916 7.97399 6.95424 9.02155 8.54879 8.11963 7.04716 9.20141 8.70162 8.24967 7.12797 9.36492 8.83929 8.36578 7.19823 21 22 23 17.35143 16.58916 18.01121 17.18455 18.65805 17.76541 15.87747 14.59033 13.46221 12.46992 10.81815 10.12855 16.41502 15.02916 13.82115 12.76408 11.01680 10.29224 16.93692 15.45112 14.16300 13.04158 11.20074 10.44243 9.51356 8.96333 8.46944 7.25933 9.64869 9.07507 8.56200 7.31246 9.77154 9.17574 8.64465 7.35866 Prepare an amortization schedule that shows how the lessor's net investment in the lease receivable will be reduced over the lease term if payments are made each January 1. (Round answers to 0 decimal places, e.g. 5,275.) Annual Lease Payment Plus URV Wildhorse Leasing Inc., (Lessor) Lease Amortization Schedule Interest Net on Net Investment Investment Recovery Date Balance of Net Investment Jan. 1, 2020 Jan. 1, 2020 Jan. 1, 2021 Jan. 1, 2022 Jan. 1, 2023 Jan. 1, 2024 Jan. 1, 2025 Prepare an amortization schedule that shows how the lessor's net investment in the lease receivable will be reduced over the lease term if payments are made each December 31. (Round answers to 0 decimal places, e.g. 5,275.) Annual Lease Payment Plus URV Wildhorse Leasing Inc., (Lessor) Lease Amortization Schedule Interest Net on Net Investment Investment Recovery Date Balance of Net Investment Jan. 1, 2020 Dec. 31, 2020 $ $ Dec. 31, 2021 Dec. 31, 2022 Dec. 31, 2023 Dec. 31, 2024 Dec. 31, 2024 Assume that the payments are due each January 1. Prepare all journal entries and adjusting journal entries for 2020 and 2021 for the lessor, assuming that Wildhorse has a calendar year end. Include the payment for the purchase of the equipment for leasing in your entries and the annual payment for repair and maintenance. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. Record journal entries in the order presented in the problem. Round factor values to 5 decimal places, e.g. 1.25124 and final answers to o decimal places, e.g. 5,275.) Date Account Titles and Explanation Debit Credit (To record purchase of equipment.) 1/1/20 (To record lease.) (To record annual repairs and maintenance payment.) (Collection of lease payment.) (To record annual repairs and maintenance payment.) (To record interest.) Prepare a partial statement of financial position at December 31, 2020, showing the net investment in leases for Wildhorse. Provide the proper classification and assume that the payments are due each January 1. (Round answers to 0 decimal places, e.g. 5,275.) Wildhorse Leasing Inc. Statement of Financial Position (Partial) Balance $