Rumsfeld Corporation leased a machine on December 31, 2016, for a 3-year period. The lease agreement calls for annual payments in the amount of $16,500 on December 31 of each year beginning on December 31, 2016. Rumsfeld has the option to purchase the machine on December 31, 2019, for $20,500 when its fair value is expected to be $30,500. The machine's estimated useful life is expected to be four years with no residual value. Rumsfeld uses straight-line depreciation for this type of machinery. The appropriate interest rate for this lease is 8%.

n/i		PV of $1		PV, ordinary annuity		PV, annuity due
1 period, 8%		0.92593		0.92593		1.00000
2 periods, 8%		0.85734		1.78326		1.92593
3 periods, 8%		0.79383		2.57710		2.78326

Required:

1.	Calculate the amount to be recorded as a leased asset and the associated lease liability. dec 31,2016, dec 31, 2017, dec 31, 2018, dec 31 2019