Recording Sales-Type Lease, Purchase Option-Lessor Flint Company leased equipment to Land Company for a five-year period. Flint paid $46,965 for the equipment, its current carrying value (estimated useful life five years). The lease started on January 1, 2020. Flint uses a target rate of return of 8% in all lease contracts. The first payment was on January 1, 2020, and the accounting periods end on December 31. The lease contract contains a purchase option stating that Land Company can purchase the equipment for $4,000 on January 1, 2025, at which time its estimated residual value is $6,500. It is reasonably certain that Land Company will exercise the purchase option at the end of the lease term. Required a. Compute the annual payment for the lessor. Note: Round answer to the nearest dollar, Note: Do not use a negative sign with your answer. $ 10,260 Amortization Schedule Journal Entries b. Prepare an amortization schedule of the lease receivable for the lessor, Note: Round each amount in the schedule to the nearest whole dollar. Use the rounded amount for later calculations in the schedule. Note: Include any net rounding difference to Lease Receivable in the Interest Revenue amount for Jan. 1, 2025. Lease Payment Interest Revenue Reduction of Lease Receivable Lease Receivable 46,965 36,705 0$ 10,260 X X X Date Jan. 1, 2020 Jan 1, 2020 $ Jan. 1, 2021 Jan. 1, 2022 Jan. 1, 2023 Jan. 1, 2024 Jan. 1, 2025 $ X X X 10,260$ 10,260 10,260 10,260 10,260 4,000 55,300 $ X X X X X X X X 0 Total 8,335$ 46,965