A lease agreement between Lennox Leasing Company and Gill Company is described in IFRS21-10. Refer to the data in IFRS21-10 and do the following for the lessor. (Round all numbers to the nearest cent.)

Instructions
  (a) Compute the amount of the lease receivable at the inception of the lease.
  (b) Prepare a lease amortization schedule for Lennox Leasing Company for the 5-year lease term.
  (c) Prepare the journal entries to reflect the signing of the lease agreement and to record the receipts and income related to this lease for the years 2014, 2015, and 2016. The lessor’s accounting period ends on December 31. Reversing entries are not used by Lennox.

Data From IFRS 21-10:

The following facts pertain to a non-cancelable lease agreement between Lennox Leasing Company and Gill Company, a lessee. (Round all numbers to the nearest cent.)

Inception date: May 1, 2014
Annual lease payment due at the beginning of each year, beginning with May 1, 2014: $18,829.49
Bargain-purchase option price at end of lease term: $4,000.00
Lease term: 5 years
Economic life of leased equipment: 10 years
Lessor’s cost: $65,000.00; fair value of asset at May 1, 2014, $81,000.00
Lessor’s implicit rate: 10%; lessee’s incremental borrowing rate 10%
The lessee assumes responsibility for all executory costs.

Instructions
  (a) Discuss the nature of this lease to Gill Company.
  (b) Discuss the nature of this lease to Lennox Company.
  (c) Prepare a lease amortization schedule for Gill Company for the 5-year lease term.
  (d) Prepare the journal entries on the lessee’s books to reflect the signing of the lease agreement and to record the payments and expenses related to this lease for the years 2014 and 2015. Gill’s annual accounting period ends on December 31. Reversing entries are used by Gill.