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Exercise 15-2 (Algo) Finance lease; calculate lease payments (L015-2] American Food Services, Inc. leased a packaging machine from Barton and Barton Corporation. Barton and Barton completed construction of the machine on January 1, 2021. The lease agreement for the $5.6 million (fair value and present value of the lease payments) machine specified four equal payments at the end of each year. The useful life of the machine was expected to be six years with no residual value. Barton and Barton's implicit interest rate was 10%. (FV of $1. PV of $1. FVA of $1. PVA of $1. FVAD of $1 and PVAD of $1) (Use appropriate factor(s) from the tables provided.) Required: 1. Prepare the journal entry for American Food Services at the beginning of the lease on January 1, 2021. 2. Prepare an amortization schedule for the four-year term of the lease. 3. & 4. Prepare the appropriate entries related to the lease on December 31, 2021 and 2023. Req 1 Reg 2 Req 3 and 4 Prepare the journal entry for American Food Services at the beginning of the lease on January 1, 2021. (Enter your ans dollars and not in millions. If no entry is required for a transaction/event, select "No journal entry required" in the first a View transaction list View journal entry worksheet General Journal Debit Credit No Date 1 January 01, 2021 Right-of-use asset Lease payable 5,600,000 5,600,000 Ron Reg 2 > Complete this question by entering your answers in the tabs below. Reg 1 Rec2 Req 3 and 4 Prepare an amortization schedule for the four-year term of the lease. (Enter your answers in whole dollar Round your answers to the nearest whole dollar. Enter all amounts as positive values.) Lease Amortization Schedule Effective Decrease in Interest Balance Year Lease Payments 2021 2022 1,766,634 1,766,634 1,766,634 1,766,634 7,066,536 2023 Outstanding Balance 5,600,000 4,393,366 3,066,069 1,606,042 0 560,000 439,337 306,607 160,592 1,466,536 1,206,634 1,327,297 1,460,027 1,606,042 5,600,000 2024 Total Prepare the appropriate entries related to the lease on December 31, 2021 and 2023. (If no entry is required for a transac select "No journal entry required" in the first account field. Enter your answers in whole dollars and not in millions. Round Intermediate and final answers to the nearest whole dollar.) View transaction list View journal entry worksheet No General Journal Debit Credit Date December 31, 2021 1 Interest expenso Lease payable Cash 560,000 1,206,634 1,766,634 2 December 31, 2021 Amortization expense Right-of-use asset 3 December 31, 2023 Interest expense Lease payable Cash 4 December 31, 2023 Amortization expense Right-of-use asset

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