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 does not know Lagatha's earnings rate.
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, 2020.
A. Determine the cost to Ragnar using tables from Chapter 6 and prepare an amortiztion schedule below.

B.Journalize the January 1, 2020 inception of the lease.
C.Assuming Ragnar uses straight-line amortization, journalize the interest accrual and amortization for December 31, 2020.

Refer to Problem 2. Lagatha's earings rate is 8%. This lease is considered a sale of goods costing $75,000.
Given that the residual value is guaranteed, determine the price from the sale.
D. Record the sales type lease:
E. Prepare an amortization table for the lease below using the tables from Chapter 6.
F. Record the inception of the lease on January 1, 2020 through its first payment.
G. Record the interest accrual on December 31, 2020.