Oriole Company, a machinery dealer, leased a machine to Pharoah Corporation on January $1,2025.$ The lease is for

an $8-$year period and requires equal annual payments of $$33,300$ at the beginning of each year. The first payment is

received on January $1,2025.$ Oriole had purchased the machine during $2024$ for $$150,000.$ Collectibility of lease

payments by Oriole is probable. Oriole set the annual rental to ensure a $6\%$ rate of return. The machine has an

economic life of $10$ years with no residual value and reverts to Oriole at the termination of the lease. Assume that

Pharoah Corporation does not know the rate implicit in the lease used by Oriole, and Pharoah's incremental borrowing

rate is $8\%.$ In addition, assume that Pharoah incurs initial direct costs of $$12,000.$

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$($a$)$

Your answer is correct.

Compute the amount of the lease liability and right$-$of$-$use asset for Pharoah. $($For calculation purposes, use $5$

decimal places as displayed in the factor table provided and round final answers to $0$ decimal

places e$.$g$.5,275.)$

Lease liability

AccountsOriole Company, a machinery dealer, leased a machine to Pharoah Corporation on January $1,2025.$ The lease is for

an $8-$year period and requires equal annual payments of $$33,300$ at the beginning of each year. The first payment is

received on January $1,2025.$ Oriole had purchased the machine during $2024$ for $$150,000.$ Collectibility of lease

payments by Oriole is probable. Oriole set the annual rental to ensure a $6\%$ rate of return. The machine has an

economic life of $10$ years with no residual value and reverts to Oriole at the termination of the lease. Assume that

Pharoah Corporation does not know the rate implicit in the lease used by Oriole, and Pharoah's incremental borrowing

rate is $8\%.$ In addition, assume that Pharoah incurs initial direct costs $of$ $$12000.*Solve$ for amortization expense and interest expense