Federated Fabrications leased a tooling machine on January $1,2024,$ for a three$-$year period ending December $31,$

The lease agreement specified annual payments of $$36,000$ beginning with the first payment at the beginning of

the lease, and each December $31$ through $2025.$

The company had the option to purchase the machine on December $30,2026,$ for $$45,000$ when its fair value was

The machine's estimated useful life was six years with no salvage value. Federated was aware that the lessor's

implicit rate of return was $12\%.$

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)$

Required:

Calculate the amount Federated should record as a right$-$of$-$use asset and lease liability for this finance lease.

Prepare an amortization schedule that describes the pattern of interest expense for Federated over the lease

term.

Prepare the appropriate entries for Federated from the beginning of the lease through the end of the lease term.

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Prepare an amortization schedule that describes the pattern of interest expense for

Federated over the lease term.

Note: Round your intermediate and final answers to the nearest whole dollar amount.

Enter all amounts as positive values.

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