On the first day of the fiscal year $($Jan $1$st$),$ ?a firm signs a lease for restaurant equipment under a $9$ ?year lease agreement.

The lease specifies annual payments of $$25,000$ ?starting on the first day of the lease and $8$ ?more on every Dec $31$st afterwards.

The equipment was acquired by the lessor at a cost of $$180,000($its fair value$)$ ?and expected to have a useful life of $13$ ?years $($after which the residual is $$0).$

The expected residual at the end of the lease is $$50,995$

The interest rate is $10\%$

This is an operating lease

What is the impact on the lessor$?$s earnings for the first year?

? Lease Revenue :

? Depreciation Expense:

What is the impact on the lessor$?$s balance sheet for the first year?

? Equipment less Accumulated Depreciation

? Deferred Lease Revenue:

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Table 4 Present Value of an Ordinary Annuity of $1 PVA (1 (1/(1 + i)"))/i n/i 1.03 1.5% 2.03 2.5% 3.08 3.53 4.0% 4.5% 1 0.99010 0.98522 0.98039 0.97561 0.97087 0.96618 0.96150 0.95694 5.0% 0.95238 5.51 6.03 7.0% 8.03 9.0% 10. 0.94787 0.94340 0.93458 0.92593 0.91743 0.9 2 1.97040 1.95588 1.94156 1.92742 1.91347 1.89969 1.88609 1.87267 1.85941 1.84632 1.83339 1.80802 1.78326 1.75911 1.7 3 2.94099 2.91220 2.88388 2.85602 2.82861 2.80164 2.77509 2.74896 2.72325 2.69793 2.67301 2.62432 2.57710 2.53129 2.4 4 3.90197 3.85438 3.80773 3.76197 3.71710 3.67308 3.62990 3.58753 3.54595 3.50515 3.46511 3.38721 3.31213 3.23972 3.1 5 4.85343 4.78264 4.71346 4.64583 4.57971 4.51505 4.45182 4.38998 4.32948 4.27028 4.21236 4.10020 3.99271 3.88965 3.7 6 5.79548 5.69719 5.60143 5.50813 5.41719 5.32855 5.24214 5.15787 5.07569 4.99553 4.91732 4.76654 4.62288 4.48592 4.3 7 6.72819 6.59821 6.47199 6.34939 6.23028 6.11454 6.00205 5.89270 5.78637 5.68297 5.58238 5.38929 5.20637 5.03295 4.8 8 7.65168 7.48593 7 32548 7.17014 7.01969 6.87396 6.73274 6.59589 6.46321 6.33457 6.20979 5.97130 5.74664 5.53482 5.3 9 8.56602 8.36052 8.16224 7.97087 7.78611 7.60769 7.43533 7.26879 7.10782 6.95220 6.80169 6.51523 6.24689 5.99525 5.7 10 9.47130 9.22218 8.98259 8.75206 8.53020 8.31661 8.11090 7.91272 7.72173 7.53763 7.36009 7.02358 6.71008 6.41766 6.1 11 10.36763 10.07112 9.78685 9.51421 9.25262 9.00155 8.76048 8.52892 8.30641 8.09254 7.88687 7.49867 7.13896 6.80519 6.4 12 11.25508 10.90751 10.57534 10.25776 9.95400 9.66333 9.38507 9.11858 8.86325 8.61852 8.38384 7.94269 7.53608 7.16073 6.8 13 12.13374 11.73153 11.34837 10.98319 10.63496 10.30274 9.98565 9.68285 9.39357 9.11708 8.85268 8.35765 7.90378 7.48690 7.1 14 13.00370 12.54338 12.10625 11.69091 11.29607 10.92052 10.56312 10.22283 9.89864 9.58965 9.29498 8.74547 B.24424 7.78615 7.3 15 13.86505 13.34323 12.84926 12.38138 11.93794 11.51741 16 14.71787 14.13126 13.57771 13.05500 12.56110 12.09412 17 15.56225 14.90765 14.29187 13.71220 13.16612 12.65132 11.11839 11.65230 12.16567 10.73955 10.37966 10.03758 9.71225 9.10791 8.55948 8.06069 7.6 11.23402 10.83777 11.70719 11.27407 10.46216 10.86461 10.10590 9.44665 8.85137 8.31256 7.8 10.47726 9.76322 9.12164 8.54363 8.0 18 16.39827 15.67256 14.99203 14.35336 13.75351 13.18968 12.65930 12.15999 11.68959 11.24607 10.82760 10.05909 9.37189 8.75563 8.2 19 17.22601 16.42617 15.67846 14.97889 14.32380 13.70984 13.13394 12.59329 12.08532 11.60765 11.15812 10.33560 9.60360 8.95011 8.3 20 18.04555 17.16864 16.35143 15.58916 14.87747 14.21240 13.59033 13.00794 12.46221 11.95038 11.46992 10.59401 9.81815 9.12855 8.5 21 18.85698 17.90014 17.01121 16.18455 15.41502 14.69797 14.02916 25 22.02316 20.71961 19 52346 18.42438 17.41315 16.48151 15.62208 13.40472 14.82821 12.82115 12.27524 11.76408 10.83553 10.01680 9.29224 8.6 14.09394 13.41393 12.78336 11.65358 10.67478 9.82258 9.0 30 25.80771 24.01584 22.39646 20.93029 19.60044 18.39205 17.29203 40 32.83469 29.91585 27.35548 25.10278 23.11477 21.35507 19.79277 16.28889 18.40158 15.37245 17.15909 14.53375 16.04612 13.76483 15.04630 12.40904 13.33171 11.25778 11.92461 10.27365 9. 10.75736 9.7 Table 4 Present Value of an Ordinary Annuity of $1 PVA (1 (1/(1 + i)"))/i n/i 1.03 1.5% 2.03 2.5% 3.08 3.53 4.0% 4.5% 1 0.99010 0.98522 0.98039 0.97561 0.97087 0.96618 0.96150 0.95694 5.0% 0.95238 5.51 6.03 7.0% 8.03 9.0% 10. 0.94787 0.94340 0.93458 0.92593 0.91743 0.9 2 1.97040 1.95588 1.94156 1.92742 1.91347 1.89969 1.88609 1.87267 1.85941 1.84632 1.83339 1.80802 1.78326 1.75911 1.7 3 2.94099 2.91220 2.88388 2.85602 2.82861 2.80164 2.77509 2.74896 2.72325 2.69793 2.67301 2.62432 2.57710 2.53129 2.4 4 3.90197 3.85438 3.80773 3.76197 3.71710 3.67308 3.62990 3.58753 3.54595 3.50515 3.46511 3.38721 3.31213 3.23972 3.1 5 4.85343 4.78264 4.71346 4.64583 4.57971 4.51505 4.45182 4.38998 4.32948 4.27028 4.21236 4.10020 3.99271 3.88965 3.7 6 5.79548 5.69719 5.60143 5.50813 5.41719 5.32855 5.24214 5.15787 5.07569 4.99553 4.91732 4.76654 4.62288 4.48592 4.3 7 6.72819 6.59821 6.47199 6.34939 6.23028 6.11454 6.00205 5.89270 5.78637 5.68297 5.58238 5.38929 5.20637 5.03295 4.8 8 7.65168 7.48593 7 32548 7.17014 7.01969 6.87396 6.73274 6.59589 6.46321 6.33457 6.20979 5.97130 5.74664 5.53482 5.3 9 8.56602 8.36052 8.16224 7.97087 7.78611 7.60769 7.43533 7.26879 7.10782 6.95220 6.80169 6.51523 6.24689 5.99525 5.7 10 9.47130 9.22218 8.98259 8.75206 8.53020 8.31661 8.11090 7.91272 7.72173 7.53763 7.36009 7.02358 6.71008 6.41766 6.1 11 10.36763 10.07112 9.78685 9.51421 9.25262 9.00155 8.76048 8.52892 8.30641 8.09254 7.88687 7.49867 7.13896 6.80519 6.4 12 11.25508 10.90751 10.57534 10.25776 9.95400 9.66333 9.38507 9.11858 8.86325 8.61852 8.38384 7.94269 7.53608 7.16073 6.8 13 12.13374 11.73153 11.34837 10.98319 10.63496 10.30274 9.98565 9.68285 9.39357 9.11708 8.85268 8.35765 7.90378 7.48690 7.1 14 13.00370 12.54338 12.10625 11.69091 11.29607 10.92052 10.56312 10.22283 9.89864 9.58965 9.29498 8.74547 B.24424 7.78615 7.3 15 13.86505 13.34323 12.84926 12.38138 11.93794 11.51741 16 14.71787 14.13126 13.57771 13.05500 12.56110 12.09412 17 15.56225 14.90765 14.29187 13.71220 13.16612 12.65132 11.11839 11.65230 12.16567 10.73955 10.37966 10.03758 9.71225 9.10791 8.55948 8.06069 7.6 11.23402 10.83777 11.70719 11.27407 10.46216 10.86461 10.10590 9.44665 8.85137 8.31256 7.8 10.47726 9.76322 9.12164 8.54363 8.0 18 16.39827 15.67256 14.99203 14.35336 13.75351 13.18968 12.65930 12.15999 11.68959 11.24607 10.82760 10.05909 9.37189 8.75563 8.2 19 17.22601 16.42617 15.67846 14.97889 14.32380 13.70984 13.13394 12.59329 12.08532 11.60765 11.15812 10.33560 9.60360 8.95011 8.3 20 18.04555 17.16864 16.35143 15.58916 14.87747 14.21240 13.59033 13.00794 12.46221 11.95038 11.46992 10.59401 9.81815 9.12855 8.5 21 18.85698 17.90014 17.01121 16.18455 15.41502 14.69797 14.02916 25 22.02316 20.71961 19 52346 18.42438 17.41315 16.48151 15.62208 13.40472 14.82821 12.82115 12.27524 11.76408 10.83553 10.01680 9.29224 8.6 14.09394 13.41393 12.78336 11.65358 10.67478 9.82258 9.0 30 25.80771 24.01584 22.39646 20.93029 19.60044 18.39205 17.29203 40 32.83469 29.91585 27.35548 25.10278 23.11477 21.35507 19.79277 16.28889 18.40158 15.37245 17.15909 14.53375 16.04612 13.76483 15.04630 12.40904 13.33171 11.25778 11.92461 10.27365 9. 10.75736 9.7