Year Lease Payments PV Factor @4% Present Value 4,694 4,694 2 4,694 0.96154 4,513 J 4,694 0.92456 4,340 4 4,694 0.88900 4,173 Total 18,776 17,720Flounder Incorporated leases a piece of equipment to Shamrock Corporation on January 1, 2020. The lease agreement called for annual rental payments of $4,694 at the beginning of each year of the 4-year lease. The equipment has an economic useful life of 6 years, a fair value of $24,900, a book value of $19.900, and both parties expect a residual value of $8,400 at the end of the lease term, though this amount is not guaranteed. Flounder set the lease payments with the intent of earning a 4% return, and Shamrock is aware of this rate. There is no bargain purchase option, ownership of the lease does not transfer at the end of the lease term, and the asset is not of a specialized nature. Click here to view factor tables. (For calculation purposes, use 5 decimal places as displayed in the factor table provided.) (a) Your answer is correct. Determine the nature of the lease to both Flounder and Shamrock. The lease is a/an operating lease to Flounder. The lease is a/an operating v lease to Shamrock. eTextbook and Media List of Accounts Attempts: 2 of 5 used (b) Your answer is partially correct. Prepare the lease amortization schedule(s) for Shamrock for all 4 years of the lease. (Round answers to O decimal places, e.g. 5,275.) SHAMROCK CORPORATION Lease Amortization Schedule Annuity-Due Basis Reduction of Annual Payment Interest on Liability Lease Liability Lease Liability 17,720 4,694 4,694 13,026 4,694 521 4,173 8,853 4,694 354 4,340 4,513 4,694 181 4,513 Lease Expense Schedule Lease Expense Interest on Amortization of Carrying Value of Straight-Line) Lease Liability ROU Asset ROU Asset 17,720 4,951 521 -.430 13,2 4,784 354 4,430 8,860 4,611 181 4,430 4,430 4,430 1,430ate Annual Payment Interest on Liability Reduction of lease liability Lease liability @ 4% of Lease liability [ Payment - Interest ) \"1:20 1?,720 \"1320 4,694 0 4,694 13,026 '1! 21 4,694 521 4,173 8,853 F11'22 4,694 354 4,340 4,513 \"1123 4,694 181 4,513 0 ate Lease Expense Interest on Liability Amortization of ROU Asset Carrying value of ROU Asset {Straight line i { Payment - Interest l \"1320 1?,720 2f 31! 20 4,951 521 x ,e\" 30 13,290 281.32; 4,784 354 x ,e\" 30 8,860 281.322 4.611 181 x ,e\" 30 4,430 2f 31! 23 4,430 0 x ,e\" 30 0