Yucatil Leasing (lessor) signs a lease on January 1, 2019, with Zebra Charters (lessee). The lease agreement calls for five annual lease payments of $80,000 at the beginning of each year. Yucatil’s implicit rate in the lease is 6%. Zebra, whose incremental borrowing rate is 5%, cannot readily determine the interest rate implicit in the lease. The asset (a boat) has an estimated value of $50,000 at the end of the lease. Zebra has an option to purchase the boat at the end of the lease for $30,000. The leased equipment has an estimated useful life of eight years and no residual value at that time. Zebra paid its lawyers $5,000 to review the lease agreement. Zebra uses the straight-line method to depreciate similar equipment that it owns and has a December 31 year end.

Required: 

a. Prepare a lease amortization schedule for this lease for Zebra Charters. 

b. Prepare Zebra Charters’ journal entries for 2019 and January 1, 2020.