Railcar Leasing Inc. early adopts ASU 2016-02 on January 1, 2017. Also, on January 1, 2017, Railcar Leasing Inc. (the lessor) purchased 10 used boxcars from Railroad Equipment Consolidators at a price of $8,749,520. Railcar leased the boxcars to the Reading Railroad Company (the lessee) on the same date. The lease calls for eight annual payments of $1,500,000 to be made at the beginning of each year (that is, the first payment is due at the inception of the lease on January 1, 2017). The boxcars have a nine-year remaining useful life, the lease contains no renewal or bargain purchase option, and possession of the boxcars reverts to the lessor at the leases end. The lessor expects the boxcars to be worth $1,000,000 at the end the lease term, but this value is not guaranteed by the lessee. The payments collectibility is reasonably certain with no important uncertainties regarding unreimbursable costs to be incurred by the lessor. The lessor has structured the lease to earn a rate of return of 12.0%. Use tables (PV of 1, PVAD of 1, and PVOA of 1) (Use the appropriate factor(s) from the tables provided.)

Required:

2. Prepare an amortization schedule for the lease for Railcar.

3. Prep

TABLE 1 Present Value of $1 1 PV (1r) = (1r) (n) Periods 11% 17% 4% 2% 3% 5% 6% 7% 8% 9% 10% 12% 15% 16% 0.98039 0.97087 0.96154 0.95238 0.94340 0.93458 0.92593 0.91743 0.90909 0.90090 0.89286 0.86957 0.86207 0.85470 2 0.96117 0,94260 0.92456 0.90703 0.89000 0,87344 0.85734 0.84168 0.82645 0.81162 0.79719 0.75614 0.74316 0.73051 3 0.94232 0,91514 0.88900 0.86384 0.83962 0.81630 0.79383 0.77218 0.75132 0.73119 0.71178 0.65752 0.64066 0.62437 4 0.92385 0.88849 0.85480 0.82270 0.79209 0.76290 0.73503 0.70843 0.68301 0.65873 0.63552 0.57175 0.55229 0.53365 5 0.90573 0.86261 0.82193 0.78353 0.74726 0.71299 0.68058 0.64993 0.62092 0.59345 0.56743 0.49718 0.47611 045611 6 0.88797 0.83748 0.79031 0.74622 0.70496 0.66634 0.63017 0.59627 0.56447 0.53464 0.50663 043233 0.41044 0.38984 7 0.87056 0.81309 0.75992 0.71068 0.66506 0.62275 0.58349 0.54703 0.51316 0.48166 0.45235 0.37594 0.35383 0.33320 0.85349 0.78941 0.73069 0.67684 0.62741 0.58201 0.54027 0.50187 0.46651 0.43393 0.40388 0.32690 0.30503 0.28478 9 0.83676 0.76642 0.70259 0.64461 0.59190 0.54393 0.50025 0.46043 0.42410 0.39092 0.36061 0.28426 0.26295 0.24340 10 0.82035 0.74409 0.67556 0.61391 0.55839 0.50835 0.46319 0.42241 0.38554 0.35218 0.32197 0.24718 0.22668 0.20804 11 0.80426 0.72242 0.64958 0.58468 0.52679 0.47509 0.42888 0.38753 0.35049 0.31728 0.28748 0.21494 0.19542 0.17781 12 0.78849 0.70138 0.62460 0.55684 0.49697 0.44401 0.39711 0.35553 0.31863 0.28584 0.25668 0.18691 0.16846 0.15197 13 0.77303 0.68095 0.60057 0.53032 0.46884 0.41496 0.36770 0.32618 0.28966 0.25751 0.22917 0.16253 0.14523 0.12989 14 0.75788 0.66112 0.57748 0.50507 0.44230 0.38782 0.34046 0.29925 0.26333 0.23199 0.20462 0.14133 0.12520 0.11 102 15 0.74301 0.64186 0.55526 0.48102 0.41727 0.36245 0.31524 0.27454 0.23939 0.20900 0.18270 0.12289 0.10793 0.09489 16 0.72845 0.62317 0.53391 0.45811 0.39365 0.33873 0.29189 0.25187 0.21763 0.18829 0.16312 0.10686 0.09304 0.08110 17 0.71416 0.60502 0.51337 0.43630 0.37136 0.31657 0.27027 0.23107 0.19784 0.16963 0.14564 0.09293 0.08021 0.06932 18 0.70016 0.58739 0.49363 0.41552 0.35034 0.29586 0.25025 0.21 199 0.17986 0.15282 0.13004 0.08081 0.06914 0.05925 0.68643 0.57029 0.47464 0.39573 0.330 51 0.27651 0.23171 0.19449 0.16351 0.13768 0.1 161 1 0.07027 0.05961 0.05064 19 20 0.67297 0.55368 045639 0.37689 0.31180 0.25842 0.21455 0.17843 0.14864 0.12403 0.10367 0.06110 0.05139 0.04328 25 0.60953 0.47761 0.37512 0.29530 0.23300 0.18425 0.14602 0.11597 0.09230 0.07361 0.05882 0.03038 0.02447 0.01974 30 0.55207 0.41 199 0.30832 0.23138 0.17411 0.13137 0.09938 0.07537 0.05731 0.04368 0.03338 0.01510 0.01165 0.00900 35 0.50003 0.35538 0.25342 0.18129 0.13011 0.09366 0.06763 0.04899 0.03558 0.02592 0.01894 0.00751 0.00555 0.00411 40 0.45289 0.30656 0.20829 0.14205 0.09722 0.06678 0.04603 0.03184 0.02209 0.01538 .01075 200373 0.00264 0.00187 TABLE 2 Present Value of an Ordinary Annuity of $1 PVOA (1r" ) (n) Periods 2% 3% 4% 5% 6% 7% 8% 9% 10% 11% 12% 15% 16% 17% 0.98039 0.97087 0.96154 0.95238 0.94340 0.93458 0.92593 0.91743 0.90909 0.90090 0.89286 0.86957 0.86207 0.85470 1.80802 1.78326 2 1.94156 1.91347 1.88609 1.85941 1.83339 1.75911 1.73554 1.71252 1.69005 1.62571 1.60523 1.58521 3 2.88388 2.82861 2.77509 272325 2.67301 2.62432 2.57710 2.53129 2.48685 2.44371 2.40183 2.28323 2.24589 2.20958 4 3.80773 3.71710 3.62990 3.54595 3.46511 3.38721 3.31213 3.23972 3.16987 3.10245 3.03735 2.85498 2.79818 2.74324 4.10020 3.99271 5 4.71346 4.57971 4.45182 4.32948 4.21236 3.88965 3.79079 3.69590 3.60478 3.35216 3.27429 3.19935 5,07569 6 5.60143 5.417 19 5.24214 4.91732 4.76654 4.62288 4.48592 4.35526 4.23054 4.11141 3.78448 3.68474 3.58918 7 6.47199 6.23028 6.00205 5.78637 5.58238 5.38929 5.20637 5.03295 4.86842 4.71220 4.56376 4.16042 4.03857 3.92238 8 7.32548 7.01969 7.78611 6.73274 6.46321 6.20979 5.97130 5.74664 5.53482 5.33493 5.14612 4.96764 4.48732 4.34359 4.20716 8.16224 7.43533 7.10782 6.80169 6.51523 6.24689 5.99525 5.75902 5.53705 5.32825 4.77158 4.60654 4.45057 10 8.98259 8.53020 8.11090 7.72173 7.36009 7.02358 6.71008 6.41766 6.14457 5.88923 5.65022 5.01877 4.83323 4.65860 8.76048 11 9.78685 9.25262 8.30641 7.88687 7.49867 7.13896 6.80519 6.49506 6.20652 5.93770 5.23371 5.02864 4.83641 12 10.57534 9.95400 9.38507 8.86325 8.38384 7.94269 7.53608 7.16073 6.81369 6.49236 6.19437 5.42062 5.19711 4.98839 13 11.34837 10.63496 9.98565 9.39357 8.85268 8.35765 7.90378 7.48690 7.10336 6.74987 6.42355 5.58315 5.34233 5.11828 8.24424 14 12.10625 11.29607 10.56312 9.89864 9.294 8.74547 7.78615 7.36669 6.98187 6.628175.72448 5.46753 5.22930 15 12.84926 11.93794 11.11839 10.37966 9.71225 9.10791 8.55948 8.06069 7.60608 7.19087 6.81086 5.84737 5.57546 5.32419 16 13.57771 12.56110 11.65230 10.83777 10.10590 9.44665 8.85137 8.31256 7.82371 7.37916 6.97399 5.95423 5.66850 5.40529 17 14.29187 13.16612 12.16567 11.27407 10.47726 9.76322 9.12164 8.54363 8.02155 7.54879 7.1 1963 6.04716 5.74870 5.47461 18 14.99203 13.75351 12.65930 11.68959 10.82760 10.05909 9.37189 8.75563 8.20141 7.70162 7.24967 6.12797 5.81785 5.53385 19 15.67846 14.32380 13.13394 12.08532 11.15812 10.33560 9.60360 8.95011 8.36492 7.83929 7.36578 6.19823 5.87746 5.58449 20 16.35143 14.87747 13.59033 12.46221 11.46992 10.59401 9.81815 9.12855 8.51356 7.96333 7.46944 6.25933 5.92884 5.62777 25 19.52346 17.41315 15.62208 14.09394 12.78336 11.65358 10.67478 9.82258 9.07704 8.42174 7.84314 6.46415 6.09709 5.76623 30 22.39646 19.60044 17.29203 15.37245 13.76483 12.40904 11.25778 10.27365 9.42691 8.69379 8.05518 6.56598 6.17720 5.82939 35 24.99862 21.48722 18.66461 16.37419 14.49825 12.94767 11.65457 10.56682 9.64416 8.85524 8.17550 6.61661 6.21534 5.85820 27.35548 23.11477 19.79277 17.15909 15.04630 13.33171 11.92461 10.75736 9.77905 8.95105 8.24378 6.64178 6.23350 5.87 133 40 t TABLE 3 Present Value of an Annuity Due of $1 PVAD 1 (1r)"1 (n) Periods 2% 3% 4% 5% 7% 8% 9% 10% 11% 12% 15% 16% 17% 1 1.00000 1.00000 1.00000 1,00000 1,00000 1.00000 1.00000 1.00000 1.00000 1.00000 1.00000 1.00000 1.00000 1.00000 2 1.98039 1.97087 1.96154 1.95238 1.94340 1.93458 1.92593 1.91743 1.90909 1.90090 1.89286 1.86957 1.86207 1.85470 3 2.94156 2.91347 2.88609 2.85941 2.83339 2.80802 2.78326 2.75911 2.73554 2.71252 2.69005 2.62571 2.60523 2.58521 3.88388 4 3.82861 3.77509 3.72325 3.67301 3.62432 3.577 10 3.53129 3.48685 3.44371 3.40183 3.28323 3.24589 3.20958 5 4.80773 4.71710 4.62990 4.54595 446511 4.38721 4.31213 4.23972 4.16987 4.10245 4.03735 3.85498 3.79818 3.74324 6 5.71346 5.57971 5.45182 5.32948 5.21236 5.10020 4.99271 4.88965 4.79079 4.69590 4.60478 4.35216 4.27429 4.19935 7 6.60143 6.41719 6.24214 6.07569 5.91732 5.76654 5.62288 5.48592 5.35526 5.23054 5.11141 4.78448 4.68474 4.58918 6.38929 7.47199 7.23028 7.00205 6.78637 6.58238 6.20637 6.03295 5.86842 5.71220 5.56376 5.16042 5.03857 4.92238 9 8.32548 8.01969 7.73274 7.46321 7.20979 6.97130 6.74664 6.53482 6.33493 6.14612 5.96764 5.48732 5.34359 5.20716 10 9,16224 8.78611 8.43533 8.10782 7.80169 7.51523 7.24689 6.99525 6.75902 6.53705 6.32825 5.77158 5.60654 5.45057 9.98259 8.72173 8.02358 11 9.53020 9.11090 8.36009 7.71008 7.41766 7.14457 6.88923 6.65022 6.01877 5.83323 5.65860 8,49867 12 10.78685 10.25262 9.76048 9.30641 8.88687 8.13896 7.80519 7.49506 7.20652 6.93770 6.23371 6.02864 5.83641 13 11.57534 10.95400 10.38507 9.86325 9.38384 8.94269 8.53608 8.16073 7.81369 7.49236 7.19437 6.42062 6.19711 5.98839 8.90378 8.486908.10336 7.74987 7.42355 6.58315 6.34233 6.11828 14 12.34837 11.63496 10.98565 10.39357 9.85268 9.35765 15 13.10625 12.29607 11.56312 10.89864 10.29498 9.74547 9.24424 8.78615 8.36669 7.98187 7.62817 6.72448 6.46753 6.22930 16 13.84926 12.93794 12.11839 11.37966 10.71225 10.10791 9.55948 9.06069 8.60608 8.19087 7.81086 6.84737 6.57546 6.32419 17 14.57771 13.56110 12.65230 11.83777 11.10590 10.44665 9.85137 9.31256 8.82371 8.37916 7.97399 6.95423 6.66850 6.40529 18 15.29187 14.16612 13.16567 12.27407 11.47726 10.76322 10.12164 9.54363 9.02155 8.54879 8.11963 7.04716 6.74870 6.47461 19 15.99203 14.75351 13.65930 12.68959 11.82760 11.05909 10.37189 9.75563 9.20141 8.70162 8.24967 7.12797 6.81785 6.53385 16.67846 15.32380 14.13394 13.08532 12.158 12 11.33560 10.60360 9.95011 9.36492 8.83929 8.36578 7.19823 6.87746 6.58449 20 25 19.91393 17.93554 16.24696 14.79864 13.55036 12.46933 11.52876 10.70661 9.98474 9.348148.78432 7.43377 7.07263 6.74649 22.84438 20.18845 17.98371 16.14107 14.59072 13.27767 12.15841 11.19828 10.36961 9.65011 9.02181 7.55088 7.16555 6.820 39 30 35 25.49859 22.13184 19.41120 17.19290 15.36814 13.85401 12.58693 11.51784 10.60857 9.82932 9.15656 7.60910 7.20979 6.85409 40 27.90259 23.80822 20.58448 18,01704 15.94907 14.26493 12.87858 11.72552 10.75696 9.93567 9.23303 7.63805 7.23086 6.86946 Complete this question by entering your answers in the tabs below. Required 2 Required 3 Prepare an amortization schedule for the lease for Railcar. (Round your answers to 2 decimal places. Input all values as positive amounts.) Interest Receivable Reduction Payment Date Balance Prior Income 1/1/2017 1/1/2017 1/1/2018 1/1/2019 1/2/2020 1/1/2021 1/1/2022 1/1/2023 1/1/2024 12/31/2024