1. The following facts pertain to a non-cancelable lease agreement between Google Company (Lessor) and Pepsi Company (Lessee).

Commencement date	January 1, 2020
Annual lease payment due at the beginning of each year, beginning with January 1, 2020.	$20,178.53
Residual value of the equipment at the end of the lease term, guaranteed by the lessee	$8,000
Expected residual value of the equipment at the end of the lease term	$3,000
Lease term	5 years
Economic life of leased equipment	5 years
Lessors cost	$85,000
Fair value of asset at January 1, 2020	$100,000
Lessees incremental borrowing rate	4%
Lessors implicit rate known by Lessee	4%
The collectability of the lease payments by Google Company is probable.	Yes
Lessees method of depreciation	Straight line basis for all assets

1. Compute the amount of the lease receivable for Google Company (Lessor) at commencement of the lease and prepare a journal entry to record it on the Lessor books. (5 pts)

1. Prepare a lease amortization schedule for the Lessor (5 pts)

1. Prepare a journal entry on the Lessors books to record receipt of the third lease payment in 2022 (5 pts)

1. Prepare a journal entry on the Lessors books to record the interest revenue in 2023 (5 pts)

1. Compute the lease liability for Pepsi Company (the Lessee). (5 pts)