Rogers Company signs a five-year capital lease with Packer Company for office equipment. The annual year-end lease payment is $16,000, and the interest rate is 7%

1.	Complete the below table to calculate the present value of Rogerss five-year lease payments.

Lease Payment Amount		PV Factor		Present value of lease payments
$16,000			=

2. Prepare the journal entry to record Rogerss capital lease at its inception.

3.

Complete a lease payment schedule for the five years of the lease with the following headings. Assume that the beginning balance of the lease liability is the present value of lease payments.

Period Ending Date	Beginning Balance of Lease Liability	Interest on Lease Liability	Reduction of Lease Liability	Cash Lease Payment	Ending Balance of Lease Liability
Year 1
Year 2
Year 3
Year 4
Year 5
Total

4.	Use straight-line depreciation and prepare the journal entry to depreciate the leased asset at the end of year 1. Assume zero salvage value and a five-year life for the office equipment.