(a) Assuming the lessor’s accounting period ends on September 30, answer the following questions with respect to this lease agreement.

(1) What items and amounts will appear on the lessor’s income statement for the year ending September 30, 2016?

(2) What items and amounts will appear on the lessor’s statement of financial position at September 30, 2016?

(3) What items and amounts will appear on the lessor’s income statement for the year ending September 30, 2017?

(4) What items and amounts will appear on the lessor’s statement of financial position at September 30, 2017?

(b) Assuming the lessor’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 lessor’s income statement for the year ending December 31, 2015?

(2) What items and amounts will appear on the lessor’s statement of financial position at December 31, 2015?

(3) What items and amounts will appear on the lessor’s income statement for the year ending December 31, 2016?
(4) What items and amounts will appear on the lessor’s statement of financial position at December 31, 2016?

Data From  P21-4 

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P21-4 (Statement of Financial Position and Income Statement Disclosure-Lessee) The following facts pertain to a non-cancelable lease agreement between Alschuler Leasing Company and McKee Electronics, a lessee, for a computer system. Inception date Lease term Economic life of leased equipment Fair value of asset at October 1, 2015 Residual value at end of lease term Lessor's implicit rate Lessee's incremental borrowing rate Annual lease payment due at the beginning of each year, beginning with October 1, 2015 October 1, 2015 6 years 6 years 300,383 -0- 10% 10% 62,700 The lessee assumes responsibility for all executory costs, which amount to 5,500 per year and are to be paid each October 1, beginning October 1, 2015. (This 5,500 is not included in the rental payment of 62,700.) 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 direct-financing lease by the lessor. Annual Lease Payment/ Interest (10%) on Unpaid Reduction Balance of of Lease Date 10/01/15 Receipt Liability/Receivable Liability/Receivable Lease Liability/Receivable 300,383 10/01/15 62,700 62,700 237,683 10/01/16 62,700 23,768 38,932 198,751 10/01/17 62,700 19,875 42,825 155,926 10/01/18 62,700 15,593 47,107 108,819 10/01/19 62,700 10,822 51,818 57,001 10/01/20 62,700 5,699* 57,001 -0- 376,200 75,817 300,383