This is a financing lease $($you do not need to perform the lease tests$).$

On January $1,2024,$ a company signed a $6-$year non$-$cancelable lease for a printing press.

The fair value and the present value of the minimum lease payments are both $$500,000.$

The lease requires annual payments of $$108,582$ at the beginning of each year, starting January $1,2024.$

The lessor$$s implicit rate is $12\%$ and the lessee knows this.

Please round all your answers to the nearest dollar.

Lessee: Financing Lease

Prepare the two journal entries that would be required on $1/1/24$ by the lessee.

Prepare the two journal entries that would be required on $12/31/24$ by the lessee.

When the lessee prepares its $12/31/24$ balance sheet, how much of the lease payable would be considered current and how much would be noncurrent?

Prepare the journal entry that the lessee would prepare on $1/1/25$ for the second cash payment.

Lessor: Sales$-$Type $($Financing$)$ Lease

Assume that the lessor$$s amortization schedule happens to match the lessee$$s $($this won$$t always be the case$).$ Given that information, what journal entries would the lessor record on:

$1/1/24,$ on the inception of the lease. The asset$$s cost to the lessor was $450,000.$ There should be $2$ entries for the inception $($not the entry for receiving the first payment$).$

$1/1/24,$ on receiving the first payment.

$12/31/24$:

$1/1/25$:

Lessee: Operating Lease

A lessee has an operating lease. It is a $5-$year lease beginning $1/1/24,$ with the first payment on $1/1/24$ and the remaining payments to be made on $12/31/24$ and each remaining $12/31$ until the lease period ends.

The lease payable and ROU asset accounts were created on the company$$s books on $1/1/24$ for $250,192.$ The company also prepared the journal entry for the first payment on $1/1/24.$

The company prepared an amortization schedule and below is the information that corresponds to the $12/31/24$ payment date.

Date

Payment

Interest

Decrease in Balance

Balance

$12/31/2024$

$60,000$

$19,019$

$40,981$

$148,211$

Prepare the entry $($or entries if you prefer$)$ to recognize the accrued interest and amortization for this company on $12/31/24.$ Remember that it is an operating lease.