Universal Leasing leases electronic equipment to a variety of businesses. The company's primary service is providing alternate financing by acquiring equipment and leasing it to customers under long-term sales-type leases. Universal earns interest under these arrangements at a 12% annual rate. The company leased an electronic typesetting machine it purchased for $36,000 to a local publisher, Desktop Inc. on December 31, 2017. The lease contract specified annual payments of $8,514 beginning January 1, 2018, the beginning of the lease, and each December 31 through 2019 (three-year lease term). The publisher had the option to purchase the machine on December 30, 2020, the end of the lease term, for $18,400 when it was expected to have a residual value of $22,400, a sufficient difference that exercise seems reasonably certain. (FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1 (Use appropriate factor(s) from the tables provided.) Required: 1. Show how Universal calculated the $8,514 annual lease payments for this sales-type lease. 2. Prepare an amortization schedule that describes the pattern of interest revenue for Universal Leasing over the lease term. 3. Prepare the appropriate entries for Universal Leasing from the beginning of the lease through the end of the lease term. Answer is not complete. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Show how Universal calculated the $8,514 annual lease payments for this sales-type lease. (Round your intermediate and final answers to the nearest whole dollar amount.) Amount to be recovered Less: Present value of the exercise price Amount to be recovered through periodic lease payments Lease payments at the beginning each of three years $ 36,000 Ol (13,824) $ 22,176 $ 8,514 Required 1 Required 2 Required 3 Prepare the appropriate entries for Universal Leasing from the beginning of the lease through the end of the lease term. (Round your intermediate and final answers to the nearest whole dollar amount. If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) General Journal Credit No 1 Date January 01, 2018 Lease receivable Equipment Debit 36,000 36,000 8,514 January 01, 2018 Cash Lease receivable 8,514 December 31, 2018 Cash 8,514 Interest revenue Lease receivable 3,298 5,215 8,514 December 31, 2018 Cash Interest revenue Lease receivable 2,673 5,841 22,400 x December 30, 2020 Cash Interest revenue Lease receivable 1,972 23,570 X