On October 1, Year 2, Knightco signed a lease with JackDeerCorp. for a piece of equipment that Knightco needs for a new production process. The lease is for four (4) years with the first payment due at the time the lease is signed and the remaining payments due on September 30^th each year thereafter. At the end of the lease, the equipment will be returned to JackDeer.In order to secure a slightly smaller lease payment, Knight co has guaranteed the estimated residual value of $49,000 at the end of the lease period.

The equipment has a fair market value of $815,000 and costsJackDeer $375,000 to produce. The estimated useful life of the asset is 6 years with no salvage value.

JackDeer used a 4% implicit rate to determine the lease payments. Knightco doesnt know JackDeers implicit interest rate.Knightcos incremental borrowing rate is 9%.

Complete the following tables:

LEASE AMORTIZATION SCHEDULE - JackDeer
Residual Value	$49,000		PV of RV:
Market Value	$815,000		PV OF MLP:
INTEREST RATE:	4.0%
TERM in YRS			PAYMENT:
			Reduction in	Lease
	Lease	Interest	Lease	Liability
Date	Payment	Expense	Liability	BALANCE
Oct. 1, Year 2				$815,000
Oct. 1, Year 2
Sept. 30, Year 3
Sept. 30, Year 4
Sept. 30, Year 5
Sept. 30, Year 6

LEASE AMORTIZATION SCHEDULE - Knightco
BPO or Guar. RV	$49,000		PV of RV:
Market Value			PV OF MLP:
INTEREST RATE:	9.0%
TERM in YRS			PAYMENT:
			Reduction in	Lease
	Lease	Interest	Lease	Liability
Date	Payment	Expense	Liability	BALANCE
Oct. 1, Year 2
Oct. 1, Year 2
Sept. 30, Year 3
Sept. 30, Year 4
Sept. 30, Year 5
Sept. 30, Year 6

Do not copy from Chegg otherwise I will report, only attempt if you can answer both parts.