Problem 21-4 (Part Level Submission) The following facts pertain to a noncancelable lease agreement between Alschuler Leasing Company and Sheridan Electronics, a lessee, for a computer system October 1, 2017 Inception date 6 years Lease term Economic life of leased equipment 6 years Fair value of asset at October 1, 2017 $275,950 Residual value at end of lease term -0- Lessor's implicit rate 10 % Lessee's incremental borrowing rate 10 % Annual lease payment due at the beginning of each year, beginning with October 1, 2017 $57,600 The collectibility of the lease payments is reasonably predictable, and there are no important uncertainties surrounding the costs yet to be incurred by the lessor. The lessee assumes responsibility for all executory costs, which amount to $5,700 per year and are to be paid each October 1, beginning October 1, 2017. (This $5,700 is not included in the rental payment of $57,600.) The asset will revert to the lessor at the end of the lease term. The straight-line depreciation method is used for all equipment. The following amortization schedule has been prepared correctly for use by both the lessor and the lessee in accounting for this lease. The lease is to be accounted for properly as a capital lease by the lessee and as a direct-financing lease by the lessor. Annual Lease Interest (10%) on Unpaid Reduction of Lease Liability/Receivable Balance of Lease Payment/Receipt Liability/Receivable Liability/Receivable Date 10/01/17 $275,950 10/01/17 $57,600 $57,600 218,350 10/01/18 $21,835 57,600 35,765 182,585 10/01/19 57,600 18,259 39,341 143,244 10/01/20 57,600 14,324 43,276 99,968 10/01/21 57,600 9,997 47,603 52,365 57,600 5,235 52,365 10/01/22 -0- $345,600 $69,650 $275,950 (4) What items and amounts will appear on the lessee's balance sheet at December 31, 2018? Balance Sheet (Partial) December 31, 2018 Current Liabilities Lease Liability 39,341 Interest Payable 20,941 Long-term Liabilities 143,244 Lease Liability Property, Plant and Equipment 275,950 Leased Equipment Accumulated Depreciation-Capital Leases (57,490) Current Assets 4275 Prepaid Lease Executory Costs Click if you would like to Show Work for this question: Open Show Work