Question: UMB leased a Cloud Computing equipment from Academy Leasing Services on January l, 2019. Academy Leasing Services paid $454,595 for the equipment. Its fair value

UMB leased a Cloud Computing equipment from Academy Leasing Services on January l, 2019. Academy Leasing Services paid $454,595 for the equipment. Its fair value is $454,595. Terms of the Lease Agreement and Related Information are as below.

Lease term: 5 years

Semiannual lease payments: $ 100,000 at beginning of each period

Economic life of asset: 5 years

Annual interest rate: 5%

Required:

a. Prepare the amortization schedule that shows the pattern of interest expense for UMB.

b. Prepare the appropriate entries for 2019 for UMB.

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