PLEASE READ QUESTION CAREFULLY. DO NOT CREATE THE AMORTIZATION SCHEDULE, IT IS ALREADY GIVEN.

BACKGROUND INFORMATION:

COMPLETED AMORTIZATION SCHEDULE:

QUESTION:

Provide the December 31, 2022 journal entries AND the December 31, 2022 Financial Statement Balances for the following accounts: Right of Use Asset, Current Lease Liability, Interest Payable, Long-term Lease Liability, and Lease Expense.

I REPEAT, DO NOT MAKE AN ADDITIONAL AMORTIZATION SCHEDULE! SOLVE FOR THE ABOVE QUESTION!

On January 1, 2019, Raven Company leased copiers from Ivan Company for a 7-year period ending on December 31, 2025. At the time of the lease agreement, the fair value of the copiers was $500,000. The lease requires 7 annual payments of $78,256 on December 31st each year. The first payment was made at the inception of the lease on January 1, 2019. The lease requires a guaranteed residual value of $100,000. On January 1, 2019, the expected residual value was $120,000 and the useful life of the copiers was 12 years. The lease included a 12% discount rate. Payment Date 1/1/19 1/1/19 12/31/20 12/31/21 12/31/22 12/31/23 12/31/24 12/31/25 78,256 78,256 78,256 78,256 78,256 78,256 78,256 Effective Decrease in Outstanding Interest Balance Balance 399,998 78,256 321,742 38,609 39,647 282,095 33,851 44,405 237,691 28,523 49,733 187,958 22,555 55,701 132,257 15,871 62,385 69,871 8,385 69,871