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Brief Exercise $15-5($Algo$)$ Finance lease; lessee; income statement effects $[$LO$15-2]$

A lease agreement that qualifies as a finance lease calls for annual lease payments of $$40,000$ over a eight$-$year lease term $($also the asset's useful life$),$ with the first payment on January $1,$ the beginning of the lease. The interest rate is $4\%.$

Required:

a$.$ Determine the present value of the lease upon the lease's inception.

b$.$ Create a partial amortization table through the second payment on January $1,$ Year $2.$

c$.$ If the lessee's fiscal year is the calendar year, what would be the amounts related to the lease that the lessee would report in its income statement for the first year ended December $31($ignore taxes$)?$

Note: Use tables, Excel, or a financial calculator. $($FV of $$1,$ PV of $$1,$ FVA of $$1,$ PVA of $$1,$ FVAD of $$1$ and PVAD of $$1)$

Complete this question by entering your answers in the tabs below.

Required A

Required C

Determine the present value of the lease upon the lease's inception.

Note: Round your answers to nearest whole number and round percentage answer to $1$ decimal place.

$\backslash$table$[[$PV factors based on$,],[$Table or Calculator function:,PVAD of $$1$