Widget Corporation ("Widget") manufactures equipment with an estimated economic life of 11 years. On May 30, 2020, Widget leases it to Gadget Corporation ("Gadget") for a period of 10 years. Details of the lease are as follows. Both companies follow ASPE. 1. The equipment has a fair value and cost at the inception of the lease of $185,078. 2. The lease contains a guaranteed residual value of $20,000. 3. Annual lease payments, due at the beginning of each year are $25,250. 4. The lease cotains no renewal options and the equipment reverts to Widget at the end of the lease. 5.Gadget's incremental interest rate, as well as implicit rate is 9%. 6.Gadget uses straight-line depreciation for similar equipment that it owns. Lease term (nper) Payment (pm) Interest rate (rate) Future value (fv) Type Present value (pv) 10 $25,250 $25,250.00 9% $20,000 1 185,078 USE EXCEL FORMULAS TO CALCULATE THE PV. Part (b): (4 marks) Prepare a lease amortization schedule for the lessee's lease obligation for the term of the lease. Reduction of Balance of Lease Date Payment Interest Principal Liability May 30 2020 $25,250 185,078 May 30 2021 $25,250 $16,657 $8,593 176,485 May 30 2022 $25,250 $15,884 $9,366 167,119 May 30 2023 $25,250 $15,041 $10,209 156,910 May 30 2024 $25,250 $14,122 $11,128 145,781 May 30 2025 $25,250 $13,120 $12,130 133,652 May 30 2026 $25,250 $12,029 $13,221 120,430 May 30 2027 $25,250 $10,839 $14,411 106,019 May 30 2028 $25,250 $9,542 $15,708 90,311 May 30 2029 $25,250 $8,128 $17,122 73, 189 May 30 2030 $25,250 $6,587 $18,663 54,526 May 30 2030 $54,526) Part (c): (7 marks) Prepare the journal entries on the lessee's books for 2020. The company's year end is December 31. Date Account title Debit Credit Part (d) (6 marks) Show how the lease would be reported on the company's year end statement of financial position Be specific as to classifications and amounts. Statement of Financial Position (partial) December 31, 2020