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A lease agreement that qualifies as a finance lease calls for annual lease payments of...

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Accounting

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A lease agreement that qualifies as a finance lease calls for annual lease payments of $40.000 over a six-year lease term (also the asset's useful life), with the first payment at January 1, the beginning of the lease. The interest rate is 7%. (FV of $1. PV of $1. EVA of $1. PVA of S1. EVAD of S1 and PVAD of S1) (Use appropriate factor(s) from the tables provided.) Required: a. Determine the present value of the lease upon the lease's inception. b. Create a partial amortization table through the second payment on January 1,2017. c. If the lessee's fiscal year is the calendar year, what would be the pretax amounts related to the lease that the lessee would report in its income statement for the year ended December 31, 2016 (ignore taxes)? Complete this question by entering your answers in the tabs below. Determine the present value of the lease upon the lease's inception. (Round your answers to nearest whole number and round percentage answer to I decimal place.)

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