The following facts pertain to a noncancelable lease agreement between Wyoming Leasing Company and Montana Company, a lessee:

• Inception date January 1, 2020
• Annual lease pmt. due at the beg. of each

year, beginning with January 1, 2020 $113,864

• Residual value of the equipment at the end of

lease term, guaranteed by the lessee $50,000

Expected Residual value equipment at end of lease term $45,000

• Lease term 6 years
• Economic life of leased equipment 6 years
• Fair value of equipment at January 1, 2020 $600,000
• Lessors implicit rate 8%
• Lessees incremental borrowing rate 8%

The equipment will revert to the lessor at the end of the lease term. The lessee uses straight-line amortization for all leased equipment.

1. Show what would be reported on the 12-31-20 balance sheet for this lease for non-current assets, current and long-term liabilities. Show what would be reported by Montana Company in their 2020 income statement for interest expense and amortization expense for this lease.