Terms of a lease agreement and related facts were as follows:

a$.$ The lease asset had a retail cash selling price of $$100,000.$ Its useful life was six years with no residual value $($straight$-$line

depreciation$).$

b$.$ Annual lease payments at the beginning of each year were $$20,873,$ beginning January $1.$

c$.$ Lessor's implicit rate when calculating annual rental payments was $10\%.$

d$.$ Costs of $$2,062$ for legal fees for the lease execution were the responsibility of the lessor.

Required:

Prepare the appropriate entries for the lessor to record the lease, the initial payment at its beginning, and at the December $31$ fiscal

year$-$end under each of the following three independent assumptions:

The lease term is three years and the lessor paid $$100,000$ to acquire the asset $($operating lease$).$

The lease term is six years and the lessor paid $$100,000$ to acquire the asset. Also assume that adjusting the lease receivable

$($net investment$)$ by initial direct costs reduces the effective rate of interest to $9\%.$

The lease term is six years and the lessor paid $$85,000$ to acquire the asset.