Q1. On December 31, 2019, Venus Corp. (the lessee) leases equipment from Gemini Corp. (the lessor). The present value of the lease payments shown below are based on the lessee's incremental borrowing rate which is equal to the lessor's implicit rate. The first lease payment is at the inception of the lease on December 31, 2019. Note that the five lease payments are not all the same. The asset will revert to the lessor at the end of the lease on 12/31/2024. There is not a residual value guarantee. When necessary, assume straight-line amortization of leased assets. Other important facts about the lease follow: Inception of the lease Annual lease payments Lease term Economic life of leased equipment Expected RV at end of lease Expected RV after 8 years Lessor's cost of equipment 12/31/2019 See below 5 years 8 years $5,000 None $14,300 PV of annual lease payments PV of the residual value Total Lessee Amortization Schedule (partially complete) $13,065 $3,701 $16.766 Annual Lease Interest Reduction of Lease Date Payments Expense Lease Payable Payable 12/31/2019 13,065 12/31/2019 3,500 3,500 9,565 12/31/2020 3,500 593 2,907 6,658 12/31/2021 2,500 413 2,087 4,570 12/31/2022 2,500 12/31/2023 2,500 12/31/2024 Total 14.500