Problem 2 Facts: Lessee and Lessor execute lease agreement on January 1, 2020. Fair market value of leased asset at inception of lease is $950,000. Estimated residual value of asset at lease termination is $475,000 of which Lessee guarantees $237,500 . Leased asset is carried at a book value of $950,000 in Lessor's accounting records in the Equipment general ledger account. The lease term is 4 years. Annual lease payments of $179,408 are made on December 31st of each year. In addition, Lessee is required to make an up-front payment of $179,408 at the inception of the lease. Lessee's incremental borrowing rate is 12% .Lessor's implicit rate is 10% and this rate is known by the Lessee. The remaining economic life of the asset is 8 years. The age of the asset is 0 years at lease inception. Required: Supply the requested information in Test spreadsheet tab P2. Answers related to Lessee: Lessee's classification of lease: enter o for operating lease or 1 for financing lease lessee_class Lessee's balance in Right-of-Use asset account at end of day 1/1/2020 after all entries related to the transaction have been recorded RightofUse_BOY1 Lessee's balance in Right-of-Use asset account at 12/31/2020 after all end-of- year adjusting entries have been made. RightofUse_EOY1 Lessee's balance in Right-of-Use asset account at 12/31/2021 after all end-of- year adjusting entries have been made. RightofUse_EOY2 Lessee's balance in Lease Payable liability account at end of day 1/1/2020 after all entries related to the lease have been recorded LeasePayable_BOY1_afterpmt Lessee's balance in Lease Payable liability account at 12/31/2020 after all entries related to the lease have been recorded LeasePayable_EOY1 Lessee's balance in Lease Payable liability account at 12/31/2021 after all entries related to the lease have been recorded LeasePayable_EOY2 Lessee's interest expense recognized for year 2020 InterestExpense Y1 Lessee's interest expense recognized for year 2021 InterestExpense Y2 Lessee's amortization expense recognized for year 2020 amorty1 Lessee's amortization expense recognized for year 2021 amortY2 Answers related to Lessor: Lessor classification of lease: enter o for operating lease or 1 for sales lease lessor_class Lessor's balance in Lease Receivable asset account at end of day 1/1/2020 after all entries related to the transaction have been recorded. If this account is not applicable, enter a 0 in the answer field. LeaseReceivable_BOY1_afterpmt Lessor's balance in Lease Receivable asset account at 12/31/2020 after all end-of- year adjusting entries have been made. If this account is not applicable, enter a O in the answer field. LeaseReceivable_EOY1 Lessor's balance in Lease Receivable asset account at 12/31/2021 after all end-of- year adjusting entries have been made. If this account is not applicable, enter a O in the answer field. LeaseReceivable_EOY2 Lessor's balance in Deferred Rent Revenue (a/k/a Deferred Lease Revenue) at end of day 1/1/2020 after all entries related to the transaction have been recorded. If this account is not applicable, enter a 0 in the answer field. DeferredRent_BOY1 Lessor's balance in Deferred Rent Revenue (a/k/a Deferred Lease Revenue) at 12/31/2020 after all end-of-year adjusting entries have been recorded. If this account is not applicable, enter a 0 in the answer field. DeferredRent_EOY1 Lessor's balance in Deferred Rent Revenue (a/k/a Deferred Lease Revenue) at 12/31/2021 after all end-of-year adjusting entries have been recorded. If this account is not applicable, enter a 0 in the answer field. DeferredRent_EOY2 Lessor's interest revenue recognized for year 2020. If not applicable, enter a 0 in the answer field. InterestRevenue Y1 Lessor's interest revenue recognized for year 2021. If not applicable, enter a 0 in the answer field. InterestRevenue Y2 Lessor's rent revenue (a/k/a/ lease revenue) recognized for year 2020. If not applicable, enter a 0 in the answer field. RentRevenue Y1 Lessor's rent revenue (a/k/a/ lease revenue) recognized for year 2021. If not applicable, enter a 0 in the answer field. RentRevenue Y2 Lessor's sales revenue recognized at inception of lease. If not applicable, enter a O in the answer field. salesrevenue Lessor's cost of sales recognized at inception of lease. If not applicable, enter a 0 in the answer field. cogs Problem 2 Facts: Lessee and Lessor execute lease agreement on January 1, 2020. Fair market value of leased asset at inception of lease is $950,000. Estimated residual value of asset at lease termination is $475,000 of which Lessee guarantees $237,500 . Leased asset is carried at a book value of $950,000 in Lessor's accounting records in the Equipment general ledger account. The lease term is 4 years. Annual lease payments of $179,408 are made on December 31st of each year. In addition, Lessee is required to make an up-front payment of $179,408 at the inception of the lease. Lessee's incremental borrowing rate is 12% .Lessor's implicit rate is 10% and this rate is known by the Lessee. The remaining economic life of the asset is 8 years. The age of the asset is 0 years at lease inception. Required: Supply the requested information in Test spreadsheet tab P2. Answers related to Lessee: Lessee's classification of lease: enter o for operating lease or 1 for financing lease lessee_class Lessee's balance in Right-of-Use asset account at end of day 1/1/2020 after all entries related to the transaction have been recorded RightofUse_BOY1 Lessee's balance in Right-of-Use asset account at 12/31/2020 after all end-of- year adjusting entries have been made. RightofUse_EOY1 Lessee's balance in Right-of-Use asset account at 12/31/2021 after all end-of- year adjusting entries have been made. RightofUse_EOY2 Lessee's balance in Lease Payable liability account at end of day 1/1/2020 after all entries related to the lease have been recorded LeasePayable_BOY1_afterpmt Lessee's balance in Lease Payable liability account at 12/31/2020 after all entries related to the lease have been recorded LeasePayable_EOY1 Lessee's balance in Lease Payable liability account at 12/31/2021 after all entries related to the lease have been recorded LeasePayable_EOY2 Lessee's interest expense recognized for year 2020 InterestExpense Y1 Lessee's interest expense recognized for year 2021 InterestExpense Y2 Lessee's amortization expense recognized for year 2020 amorty1 Lessee's amortization expense recognized for year 2021 amortY2 Answers related to Lessor: Lessor classification of lease: enter o for operating lease or 1 for sales lease lessor_class Lessor's balance in Lease Receivable asset account at end of day 1/1/2020 after all entries related to the transaction have been recorded. If this account is not applicable, enter a 0 in the answer field. LeaseReceivable_BOY1_afterpmt Lessor's balance in Lease Receivable asset account at 12/31/2020 after all end-of- year adjusting entries have been made. If this account is not applicable, enter a O in the answer field. LeaseReceivable_EOY1 Lessor's balance in Lease Receivable asset account at 12/31/2021 after all end-of- year adjusting entries have been made. If this account is not applicable, enter a O in the answer field. LeaseReceivable_EOY2 Lessor's balance in Deferred Rent Revenue (a/k/a Deferred Lease Revenue) at end of day 1/1/2020 after all entries related to the transaction have been recorded. If this account is not applicable, enter a 0 in the answer field. DeferredRent_BOY1 Lessor's balance in Deferred Rent Revenue (a/k/a Deferred Lease Revenue) at 12/31/2020 after all end-of-year adjusting entries have been recorded. If this account is not applicable, enter a 0 in the answer field. DeferredRent_EOY1 Lessor's balance in Deferred Rent Revenue (a/k/a Deferred Lease Revenue) at 12/31/2021 after all end-of-year adjusting entries have been recorded. If this account is not applicable, enter a 0 in the answer field. DeferredRent_EOY2 Lessor's interest revenue recognized for year 2020. If not applicable, enter a 0 in the answer field. InterestRevenue Y1 Lessor's interest revenue recognized for year 2021. If not applicable, enter a 0 in the answer field. InterestRevenue Y2 Lessor's rent revenue (a/k/a/ lease revenue) recognized for year 2020. If not applicable, enter a 0 in the answer field. RentRevenue Y1 Lessor's rent revenue (a/k/a/ lease revenue) recognized for year 2021. If not applicable, enter a 0 in the answer field. RentRevenue Y2 Lessor's sales revenue recognized at inception of lease. If not applicable, enter a O in the answer field. salesrevenue Lessor's cost of sales recognized at inception of lease. If not applicable, enter a 0 in the answer field. cogs