The following facts pertain to a noncancelable lease agreement between Alschuler Leasing Company and Skysong Electronics, a lessee, for a computer system.

Inception date		October 1, 2017
Lease term		6	years
Economic life of leased equipment		6	years
Fair value of asset at October 1, 2017		$289,737
Residual value at end of lease term		0
Lessors implicit rate		11	%
Lessees incremental borrowing rate		11	%
Annual lease payment due at the beginning of
each year, beginning with October 1, 2017		$61,700

The collectibility of the lease payments is reasonably predictable, and there are no important uncertainties surrounding the costs yet to be incurred by the lessor. The lessee assumes responsibility for all executory costs, which amount to $5,800 per year and are to be paid each October 1, beginning October 1, 2017. (This $5,800 is not included in the rental payment of $61,700.) The asset will revert to the lessor at the end of the lease term. The straight-line depreciation method is used for all equipment. The following amortization schedule has been prepared correctly for use by both the lessor and the lessee in accounting for this lease. The lease is to be accounted for properly as a capital lease by the lessee and as a direct-financing lease by the lessor.

Annual Lease Interest (11%) on Unpaid Reduction of Lease Balance of Lease 10/01/17 10/01/17 10/01/18 10/01/19 10/01/20 10/01/21 10/01/22 Date Payment/Receipt iability/Receivable Liability Receivable Liability/ Receivable 5289,737 228,037 191,421 150,777 105,662 55,585 $61,700 61,700 61,700 61,700 61,700 61,700 5370,200 $25,084 21,056 16,585 11,623 6,115 $80,463 $61,700 36,616 40,644 45,115 50,077 55,585 5289,737 Assuming the lessee's accounting period ends on September 30, answer the following questions with respect to this lease agreement. (Round answers to O decimal places e.g. 58,971.) (1) What items and amounts will appear on the lessee's income statement for the year ending September 30, 2018