Required Information Problem 10-12AB (Algo) Accounting for finance lease LO C3 [The following information applies to the questions displayed below.] On January 1, Rogers (lessee) signs a three-year lease for machinery that is accounted for as a finance lease. The lease requires three $26,391 lease payments (the first at the beginning of the lease and the remaining two at December 31 of Year 1 and Year 2). The present value of the three annual lease payments is $75,200, using a 5.380% interest rate. The lease payment schedule follows. Date January 1, Year 1 December 31, Year 1 December 31, Year 2 (A) Beginning Balance of Lease Liability (B) Debit Interest on (D) Credit Cash Lease Payment $ 26,391 26,391 26,391 (E) Ending Balance of Lease Liability (A) - (C) $ 48,889 25,044 e Lease Liability (C) Debit Lease Liability (D) 6.003% x (A) (B) $ 75,200 $ 8 $ 26,391 48,809 25,044 2,626 1,347 23,765 25,044 $ 3,973 $ 75,200 $ 79,173 Problem 10-12AB (Algo) Part 4 4. Prepare the December 31 journal entry to record the $26,391 cash lease payment at the end of (a) Year 1 and (b) Year 2. View transaction list Journal entry worksheet 1 2 Record lease payment on December 31 of the first year. Note: Enter debits before credits. Date Year 1 December 31 General Journal Debit Credit