Question: On January 1, 2018, Kay Company leased office furniture and equipment from Young Leasing Company....

On January 1, 2018, Kay Company leased office furniture and equipment from Young Leasing Company. The terms of the lease require annual payments of $25,000 for 20 years with the first payment being due on December 31, 2018. Assume the interest rate on the lease is 10% and the lease qualifies as a capital lease. 

Use the time value of money factors posted in carmen to answer this

A)Calculate the lease liability account balance at December 31, 2019 after the second lease payment is made.

B) Calculate the amount of the lease liability at December 31, 2019 that would be classified as a long-term liability.

Future Value of a Lump-Sum 15% 1.5209 1.7490 2.0114 20% 1.7280 2.0736 2.4883 Cauw Periods 2% 3 1.0151 | 1.0202 1.0253 1.0304 1.0355 1.0407 1.0459 1.0511 1.0617 1.0777 16 1.0831 17 1.0885 1.0939 1.0994 1.1049 1.1104 1.1160 1.1216 1.1272 25 1.1328 60 1.3489 3% 1.0927 1.1255 1.1593 1.1941 1.2299 1.2668 1.3048 1.3439 1.4257 1.5580 1.6047 1.6529 1.7024 1.7535 1.8061 1.8603 1.9161 1.9736 2.0325 2.0938 5.8916 Rate of interest per period in percent 5% 6% 8% 9% 10% 12% 1.1576 1.1910 1.2597 1.2950 1.3310 1.4049 1.21551.2625 1.3605 1.4116 1.4641 1.5735 1.2783 1.3382 1.4693 1.5386 1.6105 1.7623 1.3401 1.4185 1.5869 1.6771 1.7716 1.9738 1.4071 1.5036 1.7138 1.8280 1.9487 2.2107 1.4775 1.5940 1.8510 1.9926 2.1436 2.4760 1.5513 1.6895 1.9990 2.1719 2.3579 2.7731 1.6289 1.7909 2.1589 2.3674 2.5938 3.1059 1.7959 2.0122 2.5182 2.8127 3.1384 3.8960 2.0789 2.3966 3.1722 3.6425 4.1773 5.4736 2.1829 2.5404 3.4259 3.9703 4.5950 6.1304 2.2920 2.6928 3.7000 4.3276 5.0545 6.8660 2.4066 2.8543 3.9960 4.7171 5.5599 7.6900 7 6900 2.5270 3.0256 4.3157 5.1417 6.11598.6128 2.6533 3.2071 4.6610 5.6044 6.7275 9.6463 2.7860 3.3996 5.0338 6.1088 7.4002 10.8038 2.9253 3.6035 5.4365 6.6586 8.1403 12.1003 3.0715 3.8197 5.8715 7.25798.9543 13.5523 3.2251 4.04896.3412 7.9111 9.8497 15.1786 3.3864 4.29196.8485 8.6231 10.8347 17.0001 18.6792 32.9877 101.257 176.031 304.482 897.597 2.6600 3.5832 3.0590 4.2998 3.51795.1598 4.0456 6.1917 5.3503 8.9161 8.1371 15.4070 9.3576 18.4884 10.7613 22.1861 123755 12.3755 26.6233 14.2318 31.9480 16.3665 38.3376 18.8215 46.0051 21.6447 55.2061 24.8915 66.2474 28.6252 79.4969 32.9190 95.3962 4383.99 56347.5 Present Value of a Lump-Sum Periods 72% | 0.9852 0.9803 0.9754 0.9657 0.9609 0.9561 10 | 0.9514 0.9419 0.9279 0.9233 Rate of interest per period in percent 3% 5% 6% 8% 9% 10% 0.9151 0.8638 0.8396 0.7938 0.7722 0.7513 0.8885 0.8227 0.7920 0.7350 0.7084 0.6830 0.8626 0.7835 0.7473 0.6806 0.6499 0.6209 .6311 0.5963 0.5645 0.8131 0.7107 0.6651 0.5835 0.5470 0.5132 0.7894 0.6768 0.6274 0.5403 0.5019 0.4665 0.7664 0.6446 0.5919 0.5003 0.4604 0.4241 0.7441 0.6139 0.5584 0.4632 0.4224 0.3855 0.7014 0.5568 0.4970 0.3971 0.3555 0.3186 0.64190.4810 0.4173 0.3152 0.2745 0.2394 0.6232 0.4581 0.3937 0.2919 0.2519 0.2176 0.6050 0.4363 0.3714 0.2703 0.2311 0.1978 0.5874 0.4155 0.3503 0.2503 0.2120 0.1799 0.5703 0.3957 0.3305 0.2317 0.1945 0.1635 0.5537 0.3769 0.3118 0.2146 0.1784 0.1486 0.5375 0.35890.2942 0.1987 0.1637 0.1351 0.5219 0.3418 0.2775 0.18390.1502 0.1228 0.5067 0.3256 0.2618 0.1703 0.1378 0.1117 0.4920 0.3101 0.2470 0.1577 0.1264 0.1015 0.4776 0.2953 0.2330 0.1460 0.1160 0.0923 0.1697 0.0535 0.0303 0.0099 0.0057 0.0033 12% 0.7118 0.6355 0.5674 0.5066 0.4523 0.4039 0.3606 0.3220 0.2567 0.1827 0.1631 0.1456 0.1300 0.1161 0.1037 0.0926 0.0826 0.0738 0.0659 0.0588 0.0011 16 15% 0.6575 0.5718 0.4972 0.4323 0.3759 0.3269 0.2843 0.2472 0.1869 0.1229 0.1069 0.0929 0.0808 0.0703 0.0611 0.0531 0.0462 0.0402 0.0349 0.0304 0.0002 200 0.5787 0.4823 0.4019 0.3349 0.2791 0.2326 0.1938 0.1615 0.1122 0.0649 0.0541 0.0451 0.0376 0.0313 0.0261 0.0217 0.0181 0.0151 0.0126 0.0105 0.0001 18 0.9141 19 0.9096 0.9051 0.9006 0.8961 0.8917 0.8872 0.8828 | 0.7414 Future Value of an Annuity 5% 6% Rate of interest per period in percent Periods 72% 3% 5% 8% 9% 10% 12% 15% 20% 3 3.0150 3.0909 3.1525 3.1836 3.2464 3.2781 3.3100 3.3744 3.4725 3.6400 4 4.0301 4.1836 4.3101 4.3746 4.5061 4.5731 4.6410 4.7793 4.9934 5.3680 5 5.0503 5.3091 5.5256 5.6371 5.8667 5.9847 6.1051 6.3529 6.7424 7.4416 6.0755 6.4684 6.80196.9753 7.33597.5233 7.7156 8.1152 8.7538 9.9299 7 7.1059 7.6625 8.1420 8.3938 8.9228 9.2004 9.4872 10.0890 11.0668 12.9159 8.1414 8.89239.5491 9.8975 10.6366 11.0285 11.4359 12.2997 13.7268 16.4991 9 9.1821 10.1591 11.0266 11.4913 12.4876 13.0210 13.5795 14.7757 16.7858 20.7989 10 | 10.2280 11.4639 12.5800 13.1808 14.4866 15.1929 15.9374 17.5487 20.3037 25.9587 12 | 12.3356 14.1920 15.9170 16.8700 18.9771 20.1407 21.3843 24.1331 29.0017 39.5805 15 | 15.5366 18.5990 21.5786 23.2760 27.1521 29.3609 31.7725 37.2797 47.5804 72.0351 16 16.6142 20.1569 23.6575 25.6725 30.3243 33.0034 35.9497 42.7533 55.7175 87.4421 | 17.6973 21.7616 25.8404 28.2189 33.7502 36.9737 40.5447 48.8837 65.0751 105.931 18.7858 23.4144 28.1500 30.9057 37.4502 41.3013 45.5992 55.7497 75.8364 128.117 19 19.8797 25.1169 30.5390 33.7599 41.4463 46.0185 51.1591 63.4397 88.2118 154.740 20 20.9791 26.8704 33.0659 36.7856 45.7620 51.1601 57.2750 72.0524 102.444 186.688 21 | 22.0840 28.6765 35.7193 39.9927 50.4229 56.7645 64.0025 81.6987 118.810 225.026 23.1944 30.5368 38.5052 43.3923 55.4568 62.8733 71.4027 92.5026 137.632 271.031 24.3104 32.4529 41.4305 46.9958 60.8933 69.5319 79.5430 104.603 159.276 326.237 24 25.4320 34.4265 44.5020 50.8156 66.7648 76.7898 88.4973 118.155 184.168 392.484 26.5591 36.4593 47.7271 54.8645 73.1059 84.700998.3471 133.334 212.793 471.981 60 69.7700 163.053 353.584 533.128 1253.21 1944.79 3034.82 7471.64 29219.9 281732 Present Value of an Annuity + Periods 2% 2.9703 3.9505 4.9259 65.8964 6.8621 8 7.8230 9 8.7791 10 9.7304 12 | 11.6189 15 14.4166 16 | 15.3399 17 | 16.2586 18 17.1728 19 18.0824 2018.9874 21 19.8880 20.7841 23 | 21.6757 22.5629 23.4456 60 | 51.7255 Rate of interest per period in percent 3% 5% 6% 8% 9% 10% 12% 15% 2.8286 2.7233 2.6730 2.5771 2.5313 2.4869 2.4018 2.2832 3.7171 3.5460 3.4650 3.3121 3.2397 3.1699 3.0374 2.8550 4.5797 4.3295 4.2125 3.9927 3.8897 3.7908 3.6048 3.3522 5.41725.0757 4.9173 4.62294.48594.3553 4.1114 3.7845 6.2303 5.7864 5.5824 5.2064 5.0330 4.8684 4.5638 4.1604 7.0197 6.4632 6.2098 5.7466 5.5348 5.3349 4.9676 4.4873 7.7861 7.1078 6.8017 6.2469 5.9953 5.7590 5.3283 4.7716 8.5300 7.7217 7.3601 6.7101 6.4177 6.1450 5.6502 5.0188 9.9540 8.8633 8.3838 7.5361 7.1607 6.8137 6.1944 5.4206 11.9379 10.3797 9.7123 8.5595 8.06077.6061 6.8109 5.8474 12.5611 10.8378 10.1059 8.8514 8.3126 7.8237 6.9740 5.9542 13.1661 11.2741 10.4773 9.1216 8.5436 8.0215 7.1196 6.0472 13.7535 11.6896 10.8276 9.3719 8.7556 8.2014 7.2497 6.1280 14.3238 12.0853 11.1581 9.6036 8.9501 8.36497.3658 6.1982 14.8775 12.4622 11.4699 9.8182 9.1286 8.5200 7.4694 6.2593 15.4150 12.8212 11.7641 10.0168 9.2922 8.6487 7.5620 6.3125 15.9369 13.1630 12.0416 10.2007 9.4424 8.7715 7.6446 6.3587 16.4436 13.4886 12.3034 10.3711 9.5802 8.8832 7.7184 6.3988 16.9355 13.7986 12.5504 10.5288 9.7066 8.98477.78436.4338 17.4132 14.0939 12.7834 10.6748 9.8226 9.0770 7.8431 6.4641 27.6756 18.9293 16.1614 12.3766 11.0480 9.9672 8.3241 6.6652 20% 2.1065 2.5887 2.9906 3.3255 3.6046 3.8372 4.0310 4.1930 4.4392 4.6755 4.7296 4.7746 4.8122 4.8435 4.8696 4.8913 4.9094 4.9245 4.9371 4.9476 4.9999