Use the information below to answer the following SEVEN items On January 1, 2021, OC Leasing Company (lessor) leased equipment to Golden Gate Corporation (lessee). The following information pertains to this lease. The term of the noncancelable lease is 4 years. The equipment reverts to OC Leasing at the end of the lease term. Equal rental payments are due on December 31st of each year, beginning in 2021. The fair value and cost of the equipment to OC Leasing on January 1, 2021, are $250,000 and $200,000 respectively. The equipment has an economic life of 4 years with a guaranteed residual value of $60,000. Golden Gate expects the value of the equipment at the end of the lease term to be greater than $60,000 which means they do not expect to make any payment at that time. OC Leasing sets the annual rental to ensure a 9% rate of return. Golden Gate's incremental borrowing rate is 10%. OC leasing's implicit rate is unknown to Golden Gate. Collectability of lease payments is reasonably assured. The lease is classified as a finance lease by Golden Gate and a sales-type lease by OC Leasing. Both the lessor and lessee have accounting periods that end on December 31. Present value of an ordinary annuity of 1 for 4 periods at 9% is 3.23972 Present value of an annuity due of 1 for 4 periods at 9% is 3.53130 Present value of 1 after 4 periods at 9% is 0.70843 Present value of an ordinary annuity of 1 for 4 periods at 10% is 3.16986 Present value of an annuity due of 1 for 4 periods at 10% is 3.48685 Present value of 1 after 4 periods at 10% is 0.68301 Notice: for the following questions, use the whole present value factors presented here without rounding the factors. Round only the final answer to the nearest dollar. How would OC Leasing record the lease on January 1st, 2021? Debit Lease Receivable $250,000, Debit Cost of Goods Sold $159,019, Credit Sales Revenue $209,019, Credit Inventory $200,000. Debit Lease Receivable $250,000, Debit Cost of Goods Sold $200,000, Credit Sales Revenue $250,000, Credit Inventory $200,000. None of these Debit Lease Receivable $250,000, Debit Cost of Goods Sold $157,494, Credit Sales Revenue $207,494, Credit Inventory $200,000. Question 14 3 pts What is the annual lease payment due from Golden Gate each year? (Round to the nearest dollar) Question 15 3 pts For this question, assume that the annual lease payment is $66,000. What is the value of the right- of-use asset and lease liability (i.e., the capitalized amount) recognized by Golden Gate Company at the commencement of the lease? (Round to the nearest dollar) Question 16 3 pts For this question, assume that the annual lease payment is $66,000 and that the value of the right- of-use asset and lease liability at the commencement of the lease is $212,000. What is the amount of interest expense recorded by Golden Gate on December 31st, 2022 (end of the second year of the lease term)? (Hint: you may need to prepare the lease amortization schedule) What entry does OC Leasing use to record collecting the second lease payment on December 31, 2022? O Debit Cash XX. Credit Lease Receivable XX Debit Cash XX, Credit Interest Revenue XX O Debit Lease Receivable XX, Credit Interest Revenue XX Question 18 3 pts Assume that on December 31st, 2024, the end of the lease term, the balance of the lease receivable is $60,000 and the actual residual value of the equipment is $54,000. What entry, if any, would OC Leasing (Lessor) have to record on that date? Debit Inventory $54,000, Debit Cash $6,000, Credit Lease Receivable $60,000. No entry is required. Debit Inventory $60,000, Credit Lease Receivable $60,000. Debit Inventory $54,000, Debit Loss on Lease $6,000, Credit Lease Receivable $60,000. Will Corp. has justifiably changed its accounting method for inventory. Retrospective application of the change is practicable. The cumulative effect on all prior periods of changing to the new accounting method should be reported in financial statements as an adjustment of Beginning balance of retained earnings for the current year. Net income for the first year presented Beginning balance of retained earnings for the earliest year presented. Net income for the current year