Options: Accumulated Depreciation: Asset Under Lease, Cash, Depreciation Expense, Interest Expense, Lease Liability, Rent Expense, Retained Earnings, Right-of-Use-Asset,

On 31 December 20X0, Columbia Inc. entered into an agreement with Scotia Ltd. to lease equipment with a useful life of 6 years. Columbia Inc. will make four equal payments of $119,000 at the beginning of each lease year. Columbia Inc. anticipates that the equipment will have a residual value of $80,000 at the end of the lease, net of removal costs. Columbia Inc. has the option of extending the lease by (1) paying $80,000 to retain the equipment or (2) allowing Scotia Ltd. to remove it. Scotia Ltd.'s implicit interest rate in this lease is 9%. Columbia Inc.'s incremental borrowing rate is 10%. Columbia Inc. depreciates the leased equipment on a straight-line basis. The lease commences on 1 January 20X1. Assume that the fair value of the equipment on the open market is greater than the present value of the lease payments. (PV of $1, PVA of $1, and PVAD of $1.) (Use appropriate factor(s) from the tables provided.) Required: 1. Prepare a lease liability amortization table for this lease for Columbia Inc. (Round your final answers to the nearest whole dollar amount. Leave no cell blank. Be certain to enter "0" wherever required.) Amortization Table Net Lease Interest Payment Beg. of Incrl(Decr) in Balance Lease Period Beginning Balance Ending Balance Year 20X1 20X2 20X3 20X4 2. Prepare all entries that Columbia Inc. will record for this lease for 20X1 and 20X2. (Round your intermediate calculations and final answers to the nearest whole dollar amount. If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) View transaction list Journal entry worksheet 1 2 3 3 4 5 6 7 > Record the commencement of lease. Note: Enter debits before credits. General Journal Debit Credit Date 1 Jan. 20X1 Record entry Clear entry View general journal Journal entry worksheet Record the payment of 1st lease installment. Note: Enter debits before credits. Date General Journal Debit Credit 1 Jan. 20X1 Record entry Clear entry View general journal Journal entry worksheet Record the interest expense. Note: Enter debits before credits. Date General Journal Debit Credit 31 Dec. 20X1 Record entry Clear entry View general journal Journal entry worksheet Record the depreciation expense. Note: Enter debits before credits. General Journal Debit Credit Date 31 Dec. 20X1 Record entry Clear entry View general journal Journal entry worksheet Record the payment of 2nd lease installment. Note: Enter debits before credits. Date General Journal Debit Credit 1 Jan. 20X2 Record entry Clear entry View general journal Journal entry worksheet Record the interest expense. Note: Enter debits before credits. General Journal Debit Credit Date 31 Dec. 20X2 Record entry Clear entry View general journal Journal entry worksheet Record the commencement of lease. Note: Enter debits before credits. General Journal Debit Credit Date 1 Jan. 20X1 Record entry Clear entry View general journal Journal entry worksheet Record the payment of 1st lease installment. Note: Enter debits before credits. Date General Journal Debit Credit 1 Jan. 20X1 Record entry Clear entry View general journal Journal entry worksheet Record the interest expense. Note: Enter debits before credits. Date General Journal Debit Credit 31 Dec. 20X1 Record entry Clear entry View general journal Journal entry worksheet Record the depreciation expense. Note: Enter debits before credits. General Journal Debit Credit Date 31 Dec. 20X1 Record entry Clear entry View general journal Journal entry worksheet Record the payment of 2nd lease installment. Note: Enter debits before credits. Date General Journal Debit Credit 1 Jan. 20X2 Record entry Clear entry View general journal Journal entry worksheet Record the interest expense. Note: Enter debits before credits. General Journal Debit Credit Date 31 Dec. 20X2 Record entry Clear entry View general journal Journal entry worksheet