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At January $1,2024,$ Widget World Corporation leased manufacturing equipment from Clinton Corporation under a $6-$year lease agreement. The lease agreement specifies annual payments of $$25,000$ beginning January $1,2024,$ the beginning of the lease, and on each December $31$ thereafter through $2031.$ The equipment was acquired recently by Clinton at a cost of $$146,163($its fair value$)$ and was expected to have a useful life of $8$ years with no salvage value at the end of its life. Because the lease term is only $6$ years, the asset does have an expected residual value at the end of the lease term of $$28,000.$ Clinton seeks a $7\%$ return on its lease investments. By this arrangement, the lease is deemed to be a finance lease.

$\backslash$table$[[$Lease date,$],[$Annual lease payments,$],[$Lease term,$],[$Useful life of equipment,$],[$Residual value at end of lease term,$],[$Clinton$\text{'}$s implicit interest rate,$],[1.$ Determine the present value of the lease using Excel's PV function.,January $1,2024],[25,000,]]$

Prepare the journal entry for Widget World Corporation at the beginning of the lease on January $1,2024.$

$\backslash$table$[[$Date$,$General Journal,Debit,Credit$],[$January $1,2024,$Right$-$of$-$use asset,$146,163,,,],[,$Lease payable,,$146,163,,]]$

Prepare a partial amortization schedule for the first year of the lease.

$\backslash$table$[[$Date$,,$Lease Payments,Effective Interest,$\backslash$table$[[$Decrease in$],[$Balance$]],\backslash$table$[[$Outstanding$],[$Balance$]]],[$January $1,2024,,,,$I,$$146,163$

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