The following facts pertain to a noncancelable lease agreement between Alschuler Leasing Company and McKee Electronics, a lessee, for a computer system. Commencement date Lease term Economic life of leased equipment Residual value at the end of lease term Lessee's incremental borrowing rate Annual lease payment due at the beginning of each year, beginning with October 1, 2017 October 1, 2017 6 years 7 years $0 8.50% $65,000 The collectability 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 by the lessor for all equipment The lease is to be accounted for properly as a finance lease by the lessee and as a sales-type lease by the lessor. Instructions: Do not show "cents" in your amounts; round up to the nearest dollar. Find the present value of minium lease payments using the appropriate Excel function: The above amount becomes the basis for recording an asset and a liability at the inception of the lease. (b) _By referencing to the above PV of minimum lease payments, prepare an amortization schedule for use by the lessee in accounting for this lease. Absolute cell referencing must be used wherever appropriate. Each cell in the table should have either a 0 or a number. Every number, including 0, should have the dollar sign. Interest Expense on Unpaid Lease Reduction of Balance of | Liability Lease Liability Lease Liability Lease Payment Date 10/01/17 10/01/17 10/01/18 10/01/19 10/01/20 10/01/21 10/01/22 c) What is the total amount of lease payments over the life of the lease? d) What is the total interest expense recorded over the life of the lease? e) Assuming the lessee's accounting period ends on September 30, answer the following questions with respect to this lease agreement. If a row is not to be used, leave it completely blank. Do not enter zero. (1) What items and amounts will appear on the lessee's income statement for the year ending September 30, 2018? Item Amount (2) What items and amounts will appear on the lessee's balance sheet at September 30, 2018? 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, 2019? Item Amount :) What items and amounts will appear on the lessee's balance sheet at September 30, 2019? Current liabilities: Long-term liabilities: Non-current assets: Select account names from the following list: Amortization expense Cash Computer equipment Depreciation expense Interest expense Interest paid Lease liability Lease receivable Right-of-use asset The following facts pertain to a noncancelable lease agreement between Alschuler Leasing Company and McKee Electronics, a lessee, for a computer system. Commencement date Lease term Economic life of leased equipment Residual value at the end of lease term Lessee's incremental borrowing rate Annual lease payment due at the beginning of each year, beginning with October 1, 2017 October 1, 2017 6 years 7 years $0 8.50% $65,000 The collectability 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 by the lessor for all equipment The lease is to be accounted for properly as a finance lease by the lessee and as a sales-type lease by the lessor. Instructions: Do not show "cents" in your amounts; round up to the nearest dollar. Find the present value of minium lease payments using the appropriate Excel function: The above amount becomes the basis for recording an asset and a liability at the inception of the lease. (b) _By referencing to the above PV of minimum lease payments, prepare an amortization schedule for use by the lessee in accounting for this lease. Absolute cell referencing must be used wherever appropriate. Each cell in the table should have either a 0 or a number. Every number, including 0, should have the dollar sign. Interest Expense on Unpaid Lease Reduction of Balance of | Liability Lease Liability Lease Liability Lease Payment Date 10/01/17 10/01/17 10/01/18 10/01/19 10/01/20 10/01/21 10/01/22 c) What is the total amount of lease payments over the life of the lease? d) What is the total interest expense recorded over the life of the lease? e) Assuming the lessee's accounting period ends on September 30, answer the following questions with respect to this lease agreement. If a row is not to be used, leave it completely blank. Do not enter zero. (1) What items and amounts will appear on the lessee's income statement for the year ending September 30, 2018? Item Amount (2) What items and amounts will appear on the lessee's balance sheet at September 30, 2018? 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, 2019? Item Amount :) What items and amounts will appear on the lessee's balance sheet at September 30, 2019? Current liabilities: Long-term liabilities: Non-current assets: Select account names from the following list: Amortization expense Cash Computer equipment Depreciation expense Interest expense Interest paid Lease liability Lease receivable Right-of-use asset