Rumsfeld Corporation leased a machine on December 31, 2017, for a three -year period. The lease agreement calls for annual payments in the amount of $16,000 on December 31 of each year beginning on December 31, 2017. Rumsfeld has the option to purchase the machine on December 31, 2020, for $20,000 when its fair value is expected to be $30,000 (and is therefore reasonably expected to exercise that option). The machine's estimated useful life is expected to be 5 years with no residual value. Rumsfeld uses straight-line amortization for the right-of-use asset under a finance lease. The appropriate interest rate for this lease is 12%.

(1) Calculate the amount to be recorded by Rumsfeld as a right of use asset and the associated lease liability (round amounts to nearest $1)

(2) Complete amortization schedule for the life of this lease (round amounts to nearest $1)

(3) Prepare Rumsfeld's journal entry or entries on each of the following dates from inception through the conclusion of the lease.

1. December 31, 2017 - first lease payment:

2. December 31, 2018 - second lease payment and amortization of right-of-use asset:

3. December 31, 2019 - second lease payment and amortization of right-of-use asset:

4. December 31, 2020 - exercise of purchase option and amortization of right-of-use asset:

Note: amortization of the right-of-use asset will continue for 2 additional years beyond purchase option, until fully amortized by conclusion of useful life.

(2) Complete the following amortization schedule for the life of this lease (round amounts to nearest S1): Cash Payment Efletive Decrease in Outstanding Interest Balance Balance 12/31/17 Inception 12/31/17 S 12/31/18 12/31/19 12/31/20 S 0.00 Total (2) Complete the following amortization schedule for the life of this lease (round amounts to nearest S1): Cash Payment Efletive Decrease in Outstanding Interest Balance Balance 12/31/17 Inception 12/31/17 S 12/31/18 12/31/19 12/31/20 S 0.00 Total