Sandhill Steel Corporation, as lessee, signed a lease agreement for equipment for five years, beginning January 31, 2020. Annual rental payments of $ 49,000 are to be made at the beginning of each lease year (January 31). The insurance and repairs and maintenance costs are the lessee's obligation. The interest rate used by the lessor in setting the payment schedule is 9%; Sandhill's incremental borrowing rate is 10%. Sandhill is unaware of the rate being used by the lessor. At the end of the lease, Sandhill has the option to buy the equipment for $4,200, which is considerably below its estimated fair value at that time. The equipment has an estimated useful life of seven years with no residual value. Sandhill uses straight-line depreciation on similar equipment that it owns, and follows IFRS 16. Click here to view the factor table PRESENT VALUE OF 1. Click here to view the factor table PRESENT VALUE OF AN ANNUITY DUE. Part 1 X Your answer is incorrect. Using time value of money tables, a financial calculator, or Excel functions, calculate the PV of the lease obligation. (Round factor values to 5 decimal places, e.g. 1.25124 and final answer to 0 decimal places, e.g. 5,275.) Present value $ 204,323 e Textbook and Media List of Accounts t-player/index.html?launchid=a27b4b23-d449-4643-b606-67fdc5202d7f# Attempts: 2 of 2 used Part 2 Your answer is partially correct. Prepare the lease amortization schedule for the lease. (Hint: You may find the ROUND formula helpful for rounding in Excel.) (Round answers to O decimal places, e.g. 5,275.) Sandhill Steel Corporation (Lessee) Lease Amortization Schedule (Annuity Due Basis) Annual Lease Payment Interest on Unpaid Liability Reduction of Lease Liability Balanc of Leas Liabilit Date 1/31/20 $ 1/31/20 $ 49,000 $ 49,000 1/31/21 49,000 15,532 33,468 1/31/22 49,000 12,186 36,814 1/31/23 49,000 8,504 40,496 1/31/24 49,000 4,455 44,546 1/31/25 4,200 Part 2 - Your answer is partially correct. Prepare the lease amortization schedule for the lease. (Hint: You may find the ROUND formula helpful for rounding in Excel.) (Round answers to 0 decimal places, e.g. 5,275.) Sandhill Steel Corporation (Lessee) Lease Amortization Schedule (Annuity Due Basis) Annual Lease Payment Interest on Unpaid Liability Reduction of Lease Liability Balance of Lease Liability $ 204,324 $ 49,000 $ 49,000 155,324 49,000 15,532 33,468 121,856 49,000 12.186 36,814 85,042 49,000 8,504 40,496 44,546 49,000 4,455 44,546 0 4,200