TB Problem $15-222($Static$)$ On January $1,2024,$ Butterfly,...

On January $1,2024,$ Butterfly, Incorporated leased mining equipment from Diamond Corporation under a nine$-$year lease agreement. The lease agreement specifies annual payments of $\backslash (\backslash$$ $75,000\backslash )$ beginning January $1,2024,$ the beginning of the lease, and at each December $31$ thereafter through $2031.$ The equipment was acquired recently by Diamond at a cost of $\backslash$$$540,000($its fair value$)$ and was expected to have a useful life of $12$ years with no salvage value at the end of its life. $($Because the lease term is only $9$ years, the asset does have an expected residual value at the end of the lease term of $\backslash (\backslash$$ $33,684\backslash ).)$ Diamond seeks a $\backslash (10\backslash \%\backslash )$ return on its lease investments. By this arrangement, the lease is deemed to be a finance lease.

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

Required:

$1.$ What will be the effect of the lease on Butterfly's earnings for the first year $($ignore taxes$)?$

Note: Enter value of decrease with a negative sign. Round your final answer to the nearest whole dollar amount.

$2.$ What will be the balances in the balance sheet accounts related to the lease at the end of the first year for Butterfly $($ignore taxes$)?$

Note: Round your final answer to the nearest whole dollar amount.