The following facts pertain to a non-cancelable lease agreement between Alschuler Leasing Company and Teal Electronics, a lessee, for a computer system. Commencement date Lease term Economic life of leased equipment Fair value of asset at October 1, 2020 Book value of asset at October 1, 2020 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, 2020 October 1, 2020 6 years 6 years $286,968 $280,000 -0- 10 % 10 % $59,900 The collectibility of the lease payments is probable by the lessor. The asset will revert to the lessor at the end of the lease term. The straight-line depreciation method is used for all equipment. Lease 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 finance lease by the lessee and as a sales-type lease by the lessor. Interest (10%) on Unpaid Reduction of Lease Balance of Lease Date Payment/Receipt Liability/Receivable Liability/Receivable Liability/Receivable 10/01/20 $286,968 10/01/20 $59,900 $59,900 10/01/21 227,068 59,900 $22,707 37.193 189,875 10/01/22 59,900 18,988 40,912 148,963 10/01/23 59,900 14,896 45,004 103,959 10/01/24 59,900 10,396 49,504 54,455 10/01/25 59,900 54,455 -0- $359,400 $286,968 5,445 $72,432 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, 2021? $ (2) What items and amounts will appear on the lessee's balance sheet at September 30, 2021? Balance Sheet (Partial) Current Liabilities: $ Long-term Liabilities: $ Non-current Assets: (3) What items and amounts will appear on the lessee's income statement for the year ending September 30, 2022? (4) What items and amounts will appear on the lessee's balance sheet at September 30, 2022? Balance Sheet (Partial) Current Liabilities: $ Long-term Liabilities: $ Non-current Assets: $ SHOW LIST OF ACCOUNTS LINK TO TEXT LINK TO TEXT Assuming the lessee's accounting period ends on December 31, 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 lessee's income statement for the year ending December 31, 2020? $ (2) What items and amounts will appear on the lessee's balance sheet at December 31, 2020? Balance Sheet (Partial) Current Liabilities: $ Long-term Liabilities: Non-current Assets: (3) What items and amounts will appear on the lessee's income statement for the year ending December 31, 2021? (4) What items and amounts will appear on the lessee's balance sheet at December 31, 2021? Balance Sheet (Partial) Current Liabilities: Long-term Liabilities: Non-current Assets
