Francis Corporation (lessor) leased a building to Flannery Company (lessee) on 1/1/21 on a six-year noncancellable lease. The building has an estimated fair value of $1,285,000 and cost Francis $900,000. It has a remaining useful life of twelve years, and an estimated $350,000 residual value at the end of the lease, which Flannery has not guaranteed. Francis uses a rate of 5% in setting the lease payments.
Prepare the amortization table and the journal entries that Francis will make in 2021. What will Francis report as its Lease Receivable on 12/31/21?