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Sunbeam Leasing Company ( SLC ) signs an agreement on January 1 , 2 0 2 4 to lease equipment to Diverse Inc. ( Diverse

Sunbeam Leasing Company (SLC) signs an agreement on January 1,2024 to lease equipment to Diverse Inc. (Diverse). The following information relates to this agreement.
The term of the non-cancellable lease is five years, with no renewal option.
The equipment has an economic useful life of six years.
The asset's fair value on January 1,2024 is $262,696.74.
The equipment will revert back to SCL (the lessor) at the end of the lease term, at which time the equipment is expected to have a residual value of $21,000, which is guaranteed. The agreement requires equal annual payments of $59,871.81 to SLC, the lessor, starting on January 1,2024.
Diverse assumes responsibility for all executory costs, which include $3,000 of maintenance expense and $1,800 of insurance. You can assume these payments are made at the end of each year.
Both SLC and Diverse follow ASPE and use straight line depreciation for all equipment. Diverse's incremental rate of borrowing is 11% and SLC's implicit rate of interest is 10%.This implicit rate of 10% is known by Diverse.
Required:
a) Calculate the PV of the future minimum lease payments.
b) Prepare the amortization schedule for Diverse.
c) Prepare all journal entries Diverse will record for 2024 assuming the company has a December 31 year end. Diverse does not use reversing entries.

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