1. Operating Lease (Calculator set on BEG). - On January 1^st, 2019 Asphalt Paving Co leased a road-paving machine from ABC Equipment for 4 years. Payments under the lease were $187,635.68, with the first due upon signing of the lease on January 1, 2019, and the remainder due on December 31, 2019, and the following 2 years. The equipment had a sales price of $1,000,000 and an estimated useful life of 6 years. The interest rate implicit in the lease is 5%.
   1. Calculate the present value of future lease payments

2. How much lease expense would be reported by the Lessee under this Lease in each year?

3. Prepare the first three lines of the amortization table that would be used by both the lessee and the lessor

4. Record all journal entries related to this lease for Asphalt Paving for 2019 and 2020

2. Sales Type Lease with Bargain Purchase. (Calculator set on BEG). On January 1, 2019, Lessor Corp. leased a piece of production equipment to Lessee Corp. under an 8-year lease, with payments due at the beginning of each year. Lessor manufactured the equipment at a cost of $500,000 and its typical sales price is $750,000. The annual Lease payment was computed based on an implicit interest rate of 5%. At the end of the lease, the Lessee has an option to purchase the equipment for $50,000, which both parties are reasonably certain will occur. The equipment has an estimated useful life of 10 years, after which no residual value is expected.
   1. Calculate the amount of the lease payment that would be made at the beginning of each year

2. Prepare an amortization schedule covering the first 3 payments on this lease.

3. Prepare the Lessors journal entry on January 1, 2016 to record the lease

4. Prepare the Lessees journal entry on December 31, 2019 to record amortization expense on the Right of Use asset.