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$4.$ The following facts pertain to a non$-$cancelable lease agreement between Google Company $($Lessor$)$ and Pepsi Company $($Lessee$).$

Commencement date January $1,2020$

Annual lease payment due at the beginning of each year, beginning with January $1,2020.$ $$19,823\mathrm{.}47$

Residual value of the equipment at the end of the lease term, guaranteed by the lessee $$10,000$

Expected residual value of the equipment at the end of the lease term $$8,000$

Lease term $5$ years

Economic life of leased equipment $10$ years

Lessor$$s cost $$75,000$

Fair value of asset at January $1,2020$ $$100,000$

Lessee$$s incremental borrowing rate $6\%$

Lessor$$s implicit rate known by Lessee $4\%$

The collectability of the lease payments by Google Company is probable. Yes

Lessee$$s method of depreciation Straight line basis for all assets

a$.$ Compute the lease liability for Pepsi Company $($Lessee$)$ and prepare the journal entries on the lessee$$s book to reflect the signing of the lease agreement and to record the payments and expenses. Pepsi$$s annual accounting period ends on December $31(5$ pts$)$

b$.$ Prepare a journal entry on the Lessee$$s books to record the interest expense in $2022(5$ pts$)$

c$.$ Compute the amount of the lease receivable for Google Company $($Lessor$)$ at commencement of the lease and prepare a journal entry to record it on the Lessor books. $(5$ pts$)$

d$.$ Prepare a journal entry on the Lessor$$s books to record the interest revenue in $2023(5$ pts$)$

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