On June 30, 2021, Fly-By-Night Airlines leased a jumbo jet from Boeing Corporation. The terms of the lease require Fly-By-Night to make 20 annual payments of $2,000,000 on each June 30. Generally accepted accounting principles require this lease to be recorded as a liability for the present value of scheduled payments. Assume that a 7% interest rate properly reflects the time value of money in this situation. (FV of $1,PV of $1,FVA of $1,PVA of $1,FVAD of $1andPVAD of $1)(Use appropriate factor(s) from the tables provided.)

1.At what amount should Fly-By-Night record the lease liability on June 30, 2021, assuming that the first payment will be made on June 30, 2022?

2.At what amount should Fly-By-Night record the lease liability on June 30, 2021,beforeany payments are made, assuming that the first payment will be made on June 30, 2021?

1.

Table or Calculator Function = PVA of $1

Payment = $2000000

n= 20

i= 7%

PV= ?

2.

Table or Calculator Function = PVAD of $1

Payment = $2000000

n= 20

i= 7%

PV= ?