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Problem 5 (20%) Meadows Inc. acquired a gas station on January 1, 2015 at 820,000,...

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Problem 5 (20%) Meadows Inc. acquired a gas station on January 1, 2015 at 820,000, and leased it to Pelosi Co. The lease commenced immediately on Jan. 1, 2015 and would last 5 years. The annual lease payment was to be made at the beginning of each of the 5 years. The gas station had a useful life of 5 years and was expected to be worth $50,000 when returned by the lessee. The residual value was not guaranteed by the lessee. Meadows wished to earn a rate of return of 6% (before taxes) from the leasing arrangement, and set the annual lease payment accordingly. Meadows had a Dec. 31 fiscal year-end and followed IFRS. Required: (1) Calculate the amount of annual lease payment. (2) Prepare journal entries Meadows was required to make on January 1, 2015. (3) Prepare a lessor lease amortization schedule for Meadows Inc. for the lease term (5 years). I (4) Prepare journal entries Meadows was required to make in 2016 (the second year of the lease)

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