The following facts pertain to a noncancelable lease agreement between Alschuler

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The following facts pertain to a noncancelable lease agreement between Alschuler Leasing Company and McKee Electronics, a lessee, for a computer system. Commencement date October 1, 2017 Lease term 6 years Economic life of leased equipment 6 years Fair value of asset at October 1, 2017 $313,043 Book value of asset at October 1, 2017 $280,000 $313,042.92 Residual value at end of lease term -   Lessor's implicit rate 8% Lessee's incremental borrowing rate 8% Annual lease payment due at the beginning of each year,
       beginning with October 1, 2017 $62,700 The collectability of the lease payments is probable by the lessor. The asset will revert to the lessor at the end of the lease term. The straight-line depreciation method is used for all equipment. The following amortization schedule has been prepared correctly for use by both the lessor and the lessee in accounting for this lease. The lease is to be accounted for properly as a finance lease by the lessee and as a sales-type lease by the lessor. Date Lease Payment / Receipt Interest (8%) on Unpaid Liability / Receivable Reduction of Lease Liability / Receivable Balance of Lease Liability / Receivable 10/01/17 $313,043 10/01/17 $62,700 0 $62,700.00 250,343 10/01/18 $62,700 $20,027 $42,672.57 207,670 10/01/19 $62,700 16,614 $46,086.37 161,584 10/01/20 $62,700 12,927 $49,773.28 111,811 10/01/21 $62,700 8,945 $53,755.14 58,056 10/01/22 $62,700 4,644 $58,055.56 0 $376,200 $63,157 $313,043 Amounts may differ due to rounding resulting from more precise calculations in Excel® as compared to the solutions manual. Assuming the lessee's accounting period ends on December 31, answer the following questions with respect to this lease agreement. (1) What items and amounts will appear on the lessee's income statement for the year ending December 31, 2017? Interest Expense 5,007 Amortization expense 13,043 (2) What items and amounts will appear on the lessee's balance sheet at December 31, 2017? (3) What items and amounts will appear on the lessee's income statement for the year ending December 31, 2018? (4) What items and amounts will appear on the lessee's balance sheet at December 31, 2018? The following facts pertain to a noncancelable lease agreement between Alschuler Leasing Company and McKee Electronics, a lessee, for a computer system. Commencement date October 1, 2017 Lease term 6 years Economic life of leased equipment 6 years Fair value of asset at October 1, 2017 $313,043 Book value of asset at October 1, 2017 $280,000 $313,042.92 Residual value at end of lease term -   Lessor's implicit rate 8% Lessee's incremental borrowing rate 8% Annual lease payment due at the beginning of each year,
       beginning with October 1, 2017 $62,700 The collectability of the lease payments is probable by the lessor. The asset will revert to the lessor at the end of the lease term. The straight-line depreciation method is used for all equipment. The following amortization schedule has been prepared correctly for use by both the lessor and the lessee in accounting for this lease. The lease is to be accounted for properly as a finance lease by the lessee and as a sales-type lease by the lessor. Date Lease Payment / Receipt Interest (8%) on Unpaid Liability / Receivable Reduction of Lease Liability / Receivable Balance of Lease Liability / Receivable 10/01/17 $313,043 10/01/17 $62,700 0 $62,700.00 250,343 10/01/18 $62,700 $20,027 $42,672.57 207,670 10/01/19 $62,700 16,614 $46,086.37 161,584 10/01/20 $62,700 12,927 $49,773.28 111,811 10/01/21 $62,700 8,945 $53,755.14 58,056 10/01/22 $62,700 4,644 $58,055.56 0 $376,200 $63,157 $313,043 Amounts may differ due to rounding resulting from more precise calculations in Excel® as compared to the solutions manual. Assuming the lessee's accounting period ends on December 31, answer the following questions with respect to this lease agreement. (1) What items and amounts will appear on the lessee's income statement for the year ending December 31, 2017? Interest Expense 5,007 Amortization expense 13,043 (2) What items and amounts will appear on the lessee's balance sheet at December 31, 2017? (3) What items and amounts will appear on the lessee's income statement for the year ending December 31, 2018? (4) What items and amounts will appear on the lessee's balance sheet at December 31, 2018?

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Date Lease Payment / Receipt Interest (8%) on Unpaid Liability / Receivable Reduction of Lease Liability / Receivable Balance of Lease Liability / Receivable 01-Oct-17 313043 01-Oct-17                          62,700                                                   -                                       62,700                                     2,50,343 01-Oct-18                          62,700                                         20,027                                     42,673                                     2,07,670 01-Oct-19                          62,700                                         16,614                                     46,086                                     1,61,584 01-Oct-20                          62,700                                         12,927                                     49,773                                     1,11,811 01-Oct-21                          62,700                                            8,945                                     53,755                                        58,056 01-Oct-22                          62,700                                            4,644                                     58,056                                                   0 2017 2018 Income Statement: Interest Expense                                            5,007                                     19,174 (20027-5007)+16614*3/12 Amortization 13043 52174 313043/6 Balance Sheet: Current Liability: -Lease Liability (42673+5007) 47680 (46086)+16614*3/12 50240 Long Term Liability: -Lease Liability 207670 161584 Non Current Asset: -Righ tof use asset 313043-13043 300000 313043-13043-52174 247826

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