Problem 14-11AC On January 1, Rogers (lessee) signs a three-year lease for machinery that is accounted for as a finance lease. The lease requires three S18,000 lease payments (the first at the beginning of the lease and the remaining two at December 31 of Year 1 and Year 2). The present value of the three annual lease payments is $51,000, using a 6.003 % interest rate. The lease payment schedule follows. Accounting for finance lease C3 Payments (A) () Debi (C) (D) (E) Debi Credit Ending Balance Interest on Cash Lease of Lease Liability Payment Beginning Balance Lease Liability Lease Liability of Lease Liability 6.003% x (A) Date (D)-(B) () - () S18,000 Jan. 1, Year $51.000 S18,000 $33,000 33,000 16,98 Dec. 31, Year 1.... S1,981 16,019 18,000 16,98 Dec. 31, Year 2 1,019 $3,000 16,981 18,000 $54,000 $51,000 Required 1. Prepare the January 1 journal entry at the start of the lease to record any asset or liability. 2. Prepare the January 1 journal entry to record the first $18,000 cash lease payment. 3. Prepare the December 31 journal entry to record straight-line amortization with zero salvage value at the end of (a) Year 1, (b) Year 2, and (e) Year 3 4. Prepare the December 31 journal entry to record the $18,000 cash lease payment at the end of (a) Year and (b) Year 2 Refer to the lease details in Problem 14-11A. Assume that this lease is classified as an operating lease instead of a finance lease. Problem 14-12A Accounting for operating lease Required C3 1. Prepare the January 1 journal entry at the start of the lease to record any asset or liability 2. Prepare the January I journal entry to record the first $18.000 cash lease payment 3. Prepare the December 31 journal entry to record amortization at the end of (a) Year 1, (b) Year 2, and (c) Year 3 4. Prepare the December 31 journal entry to record the $18,000 cash lease payment at the end of (a) Year and (b) Year 2