Watson Co. entered into a lease arrangement for a truck on 1 April 20X2 that had the following terms:

• The lease payments are $12,500 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 $3,600 per year.
• Based on an allocation of the lease payment on relative stand-alone prices, the lease and non-lease components (maintenance) are $11,300 and $1,200 respectively.
• Expected amounts to be paid under theresidualvalueguaranteeis $15,000 at the end of the first lease term and $5,000 at the end of the second lease term.
• The leased asset has a useful life of ten years and a fair value of $70,000. The interest rate implicit in the lease is 7%.

(PV of $1,PVA of $1, andPVAD 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.)

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.)

Record the inception of lease.

2. a lease liability amortization table for only the first four payments.(Round the intermediate and final answers to the nearest whole dollar amount.)

3. List the items that would appear in the lessee's SCI for the year ended 31 December 20X3.(Round the intermediate and final answers to the nearest whole dollar amount.)