Reporting a Finance Lease

Pier10 Inc. entered into a 5-year lease and recorded a right-of-use asset and lease liability of $88,000 on January 1, 2020. Pier10 Inc. was aware of the lessors implicit rate of interest of 5%. The equipment under lease had an estimated 5-year useful life with no residual value. The first lease payment of $19,358 was due upon commencement of the lease. Show the balance sheet presentation on December 31, 2020, and the income statement presentation for the year ended December 31, 2020.

• Note: List accounts in alphabetical order.
• Note: Round your answers to the nearest whole dollar.
• Note: Do not use negative signs with your answers.

Balance Sheet	December 31, 2020
Assets
Noncurrent Assets
AnswerCashInitial Direct CostInventoryPrepaid Maintenance ExpenseEquipmentAccumulated DepreciationLease ReceivableRight-of-Use AssetAccrued Legal ExpenseDeferred Lease RevenueDeposit LiabilityLease Incentive PayableLease LiabilitySales RevenueInterest RevenueLease RevenueCost of Goods SoldAmortization ExpenseDepreciation ExpenseInterest ExpenseLease ExpenseLoss on LeaseSelling Expense	Answer
Liabilities
Current liabilities
AnswerCashInitial Direct CostInventoryPrepaid Maintenance ExpenseEquipmentAccumulated DepreciationLease ReceivableRight-of-Use AssetAccrued Legal ExpenseDeferred Lease RevenueDeposit LiabilityLease Incentive PayableLease LiabilitySales RevenueInterest RevenueLease RevenueCost of Goods SoldAmortization ExpenseDepreciation ExpenseInterest ExpenseLease ExpenseLoss on LeaseSelling Expense	Answer
Noncurrent liabilities
AnswerCashInitial Direct CostInventoryPrepaid Maintenance ExpenseEquipmentAccumulated DepreciationLease ReceivableRight-of-Use AssetAccrued Legal ExpenseDeferred Lease RevenueDeposit LiabilityLease Incentive PayableLease LiabilitySales RevenueInterest RevenueLease RevenueCost of Goods SoldAmortization ExpenseDepreciation ExpenseInterest ExpenseLease ExpenseLoss on LeaseSelling Expense	Answer

Income Statement	2020
Expenses
AnswerCashInitial Direct CostInventoryPrepaid Maintenance ExpenseEquipmentAccumulated DepreciationLease ReceivableRight-of-Use AssetAccrued Legal ExpenseDeferred Lease RevenueDeposit LiabilityLease Incentive PayableLease LiabilitySales RevenueInterest RevenueLease RevenueCost of Goods SoldAmortization ExpenseDepreciation ExpenseInterest ExpenseLease ExpenseLoss on LeaseSelling Expense	Answer
AnswerCashInitial Direct CostInventoryPrepaid Maintenance ExpenseEquipmentAccumulated DepreciationLease ReceivableRight-of-Use AssetAccrued Legal ExpenseDeferred Lease RevenueDeposit LiabilityLease Incentive PayableLease LiabilitySales RevenueInterest RevenueLease RevenueCost of Goods SoldAmortization ExpenseDepreciation ExpenseInterest ExpenseLease ExpenseLoss on LeaseSelling Expense	Answer