PROBLEM TWO: Lease Accounting by Lessee: ABC Co. (lessee) and DXY Co. (lessor) contracted on a four-year lease on January 1, 2021. The leased equipment cost DXY Co. $65,000. The equipment had an economic life of 6 years. The equipment would revert to DXY Co. at the termination/end of the lease. Annual lease payments were $15,999.49 and were payable at the beginning of each year on January 1 of each year. DXY Co.'s implicit rate of return was 9%, and this fact was known by ABC Co. The equipment was expected to have a residual value of $12,000 and did not have a bargain purchase option. Assume the lease qualified as a finance lease. Required: a. Prepare an amortization schedule for the lease liability. b. Prepare journal entries for ABC Co. for 2021 to record: i. The right-of-use asset ii. The lease liability iii. The first lease payment iv. The year-end journal entry(ies) c. Suppose, instead, that ABC Company estimates the residual value at lease termination to be $3,500. Repeat requirements b(i) and b(ii).