The following facts pertain to a noncancelable lease agreement between Concord Leasing Company and McKee Electronics, a lessee, for a computer system. October 1, 2017 6 years 6 years $261,098 Inception date Lease term Economic life of leased equipment Fair value of asset at October 1, 2017 Residual value at end of lease term Lessor's implicit rate Lessee's incremental borrowing rate Annual lease payment due at the beginning of each year, beginning with October 1, 2017 -0- 10 % 10 % $54,500 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 $4,700 per year and are to be paid each October 1, beginning October 1, 2017. (This $4,700 is not included in the rental payment of $54,500.) 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 Payment/Receipt Date 10/01/17 10/01/17 10/01/18 10/01/19 10/01/20 10/01/21 10/01/22 $ 54,500 54,500 54,500 54,500 54,500 54,500 $327,000 Interest (10%) on Unpaid Reduction of Lease Balance of Lease Liability/Receivable Liability/Receivable Liability/Receivable $261,098 $54,500 206,598 $20,660 33,840 172,758 17,276 37,224 135,534 13,553 40,947 94,587 9,459 45,041 49,546 4,954 49,546 $65,902 $261,098 -0- (a) Assuming the lessor's accounting period ends on September 30, answer the following questions with respect to this lease agreement. (Round answers to 0 decimal places e.g. 58,971.) (1) What items and amounts will appear on the lessor's income statement for the year ending September 30, 2018? $