On 2 January 20X4, Yvan Limited entered into a five-year lease for office equipment from Jeffery Leasing Incorporation. The lease calls for annual lease payments of \(\$ 100,000\), payable at the beginning of each lease year. Yvan's incremental borrowing rate is \(6 \%\). The lessor's implicit rate in the lease is also \(6 \%\). The fair value of the equipment is \(\$ 450,000\). Yvan Limited amortizes office equipment on a straight-line basis.

Required:

1. Prepare the lease liability amortization schedule for Yvan Limited.

2. What amounts will appear on Yvan Limited's SFP, income statement, and statement of cash flows as of 31 December 20X4?

3. Prepare the journal entries relating to the leased asset and the lease liability for \(20 \mathrm{X} 5\) for Yvan Limited. Use the net method of recording the liability.

4. Prepare the journal entries relating to the lease for Jeffrey Leasing Incorporated for 20X5. Use the gross method of recording the leased asset.