On January 1, 20X1, Bare Trees Company signed a three-year noncancelable lease with Dreams Inc. The lease calls for three payments of $62,258.09 to be made at each year-end. The lease payments include $3,000 of executory costs related to service. The lease is nonrenewable and has no bargain purchase option. Ownership of the leased asset reverts to Dreams at the end of the lease period, at which time Bare Trees has guaranteed that the leased asset will be worth at least $15,000. The leased asset has an expected useful life of four years, and Bare Trees uses straight-line depreciation for financial reporting purposes. Bare Trees's incremental borrowing rate is 9%. Use tables (PV of 1, PVAD of 1, and PVOA of 1) (Use the appropriate factor(s) from the tables provided.) Required: 1. Prepare Bare Trees Company's amortization schedule for the lease liability. 2. Prepare Bare Trees Company's journal entries to record (a) the lease on January 1, 20X1; (b) the lease payments on December 31, 20X1 and 20X2; and (c) the right-of-use asset amortization in 20X1 and 20x2. 3. Assume that at the end of the lease term, the leased asset will be worth $16,000. Make Bare Trees Company's journal entry to account for the residual value guarantee. 4. Repeat requirement 3, but assume that the leased asset will be worth only $12,000 at the end of the lease term. Answer is not complete. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Required 4 Prepare Bare Trees Company's amortization schedule for the lease liability. (Round your intermediate calculations and final answers to 2 decimal places. Input all values as positive amounts) Amortization of Finance Lease Liability Bare Trees Company ($15,000 Guaranteed Residual Value) Lease Date Interest Portion Cash Payment Liability Reduction Liability 01/01/X1 12/31/X1 $ 14,542.47 $ 59,258.09 10,518.06 59,258.09 61,309.74 X 59,258.09 $ 161,583.00 $ 44,715.62 116,867.38 48,740.03 68,127.35 X 53,127.35 X 15,000.00 12/31/X2 12/31/X3 Required 1 Required 2 Required 3 Required 4 Prepare Bare Trees Company's journal entries to record (a) the lease on January 1, 20X1; (b) the lease payments on December 31, 20X1 and 20X2; and (c) the right-of-use asset amortization in 20X1 and 20x2. (If no entry is required for a particular transaction, select "No journal entry required" in the first account field. Round your answers to 2 decimal places.) No Date General Journal Debit Credit 1 01/01/20X1 Leased asset X 161,583.00 Obligations under capital leases x 161,583.00 2 12/31/20X1 Interest expense Obligations under capital leases Miscellaneous expenses 14,542.47 44,715.62 x 3,000.00 Cash 62,258.09 3 12/31/20X2 Interest expense Obligations under capital leases Cash 10,518.06 48,740.03 X 62,258.09 X 4 12/31/20X1 X 48,861.00 Depreciation expense Accumulated depreciation - leased assets 48,861.00 5 12/31/20X2 No Transaction Recorded X Answer is not complete. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Required 4 Assume that at the end of the lease term, the leased asset will be worth $16,000. Make Bare Trees Company's journal entry to account for the residual value guarantee. (If no entry is required for a particular transaction, select "No journal entry required" in the first account field. Round your answers to 2 decimal places.) No Transaction General Journal Debit Credit 1 1 Obligations under capital leases 15,000.00 ROU asset - finance lease 15,000.00 Required 2 Required 4 X Answer is not complete. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Required 4 Repeat requirement 3, but assume that the leased asset will be worth only $12,000 at the end of the lease term. (If no entry is required for a particular transaction, select "No journal entry required" in the first account field. Round your answers to 2 decimal places.) No Transaction General Journal Debit Credit 1 1 Obligations under capital leases 15,000.00 3,000.00 Loss on residual value guarantee ROU asset - operating lease 15,000.00 X 3,000.00 Cash