Question: American Food Services, Inc. leased a packaging machine from Barton and Barton Corporation. Barton and Bar- ton completed construction of the machine on January 1,

American Food Services, Inc. leased a packaging machine from Barton and Barton Corporation. Barton and Bar- ton completed construction of the machine on January 1, 2018. The lease agreement for the $4 million (fair value and present value of the lease payments) machine specified four equal payments at the end of each year. The use- ful life of the machine was expected to be four years with no residual value. Barton and Bartons implicit interest rate was 10%.

A. Show the income statement & balance sheet effect for 2018.

B. Show the income statement & balance sheet effect for 2020.

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