Watson Co$.$ entered into a lease arrangement for a truck on $1$ April $202$ that had the following terms:Watson Co$.$ entered into a lease arrangement for a truck on $1$ April $202$ that had the following terms:

The lease payments are $$13,900$ per year, payable each $1$ April for four years. The lease may be renewed at the option of the lessor

for a further five years for $$4,100$ per year.

Based on an allocation of the lease payment on relatlve stand$-$alone prices, the lease and non$-$lease components $($maintenance$)$ are

$$12600$ and $$1,300$ respectively.

Expected amounts to be paid under the residual value guarantee are $$10,000$ if the lessee ends the lease at the end of the first

lease term, and $$3,300$ If they end the lease at the end of the second lease term.

The leased asset has a useful ilfe of ten years and a falr value of $$62,400.$ The Interest rate Implicit in the lease is $10\%.$

$($PV of $$1,$ PVA of $$1,$ and PVAD of $$1.)($Use approprlate factor$($s$)$ from the tables provided.$)$

Required:

$1-$a$.$ Calculate the right$-$of$-$use asset. $($Round the intermediate and final answer to the nearest whole dollar amount.$)$

Answer is complete but not entirely correct.

Right$-$of$-$use asset $$50,859$&

$1-$b$.$ Record the initlal joumal entry. $($If no entry is required for a transaction$/$event$,$ select $"$No journal entry required" in the first

account field. Round intermedlate calculations and final answers to the nearest whole dollar amount.$)$

Answer is complete but not entirely correct.

Prepare a lease liability amortization table for only the first four payments. $($Round the intermediate and final answers to the

nearest whole dollar amount.$)$

Answer is complete but not entirely correct.

The lease payments are $$13,900$ per year, payable each $1$ April for four years. The lease may be renewed at the option of the lessor

for a further five years for $$4,100$ per year.

Based on an allocation of the lease payment on relative stand$-$alone prices, the lease and non$-$lease components $($maintenance$)$ are

$$12,600$ and $$1,300$ respectively.

Expected amounts to be paid under the residual value guarantee are $$10,000$ if the lessee ends the lease at the end of the first

lease term, and $$3,300$ if they end the lease at the end of the second lease term.

The leased asset has a useful life of ten years and a fair value of $$62,400.$ The interest rate implicit in the lease is $10\%.$

$($PV of $$1,$ PVA of $$1,$ and PVAD of $$1.)($Use appropriate factor$($s$)$ from the tables provided.$)$

Required:

$1-$a$.$ Calculate the right$-$of$-$use asset. $($Round the intermediate and final answer to the nearest whole dollar amount.$)$

Right$-$of$-$use asset

$1-$b$.$ Record the initial journal entry. $($If no entry is required for a transaction$/$event$,$ select $"$No journal entry required" in the first

account field. Round intermediate calculations and final answers to the nearest whole dollar amount.$)$