Ragnar Company leased a machine from Lagatha Leasing. The lease is for four years. The life of the asset

is four years. The lease is non$-$cancelable. Ragnar's borrowing rate is $8\%$ and knows Lagatha's earnings rate of $5\%.$

The lease requires four payments at the beginning of each year of $$100,000.$ There is a guaranteed residual value

of $$12,000,$ but Ragnar expects to return the asset with a worth of $$10,000.$ The lease begins January $1,2023.$

a$.$ Determine the cost to Ragnar using tables from Chapter $5$ or $6$ in an earlier edition and prepare an amortiztion schedule below.

b$.$ Journalize the January $1,2023$ inception of the lease and first payment.

c$.$ Assuming Ragnar uses straight line amortization, journalize the interest accrual and amortization for December $31,2023.$

Refer to Problem $2.$ Lagatha's earnings rate is $5\%.$ This lease is considered a sale of goods costing $$75,000.$

a$.$ Given that the residual value is guaranteed, determine the price from the sale.

b$.$ Record the sale and the first payment on January $1,2023.$

c$.$ Prepare an amortization table for the lease below using the tables from Chapter $5$ or $6$ in an earlier edition.