Question

On January 1, 2021, Miller Company leased equipment from Alpha Louse Corp. Alphe Lease Corp purchased the equipment at a cost of $150.000. The agreement specified three
payments of $50,000 beginning January 1, 2021, the beginning of the lense, and on each December 31 thereafter through 2022. The useful life of the equipment is estimated to be five years wor's
implicit rate was 5%. The present value of those three payments at a discount rate of % is $142,971,
On January 1, 2022 (after one year and two payments), Miller and Alpha agreed to extend the lease term by two years and lease payments stay to be $50,000. The market rate of interest that the
was 5%. The present value of these remaining three payments at a discount rate of 5% is $136,163,
Answer the following questions:
(Do not add dollar sign, do not add comma by yourself to your amount, round the answer to the whole number)
1. What is the amount related to the lease that Miller will report in its income statement for the year ended December 31, 2021 dgnore income taxes)
2. What is the balance of lease liability that Miller will report in its balance sheet at December 31, 2021
3. What is the balance of right of use asset that Miller will report in its balance sheet at December 31, 2021
4 What is the amount related to the bonds that Miller will report in its statement of cash flows for the year ended December 31, 2021 Indicate the category in which to classify cashflows
____<(amount),_____activities,____activities at,_____amount
5 What is the impact of lease contract on Alpha 2022 net income?
6. (bonus question additional 10 points) What is the amount of amortization expense reported on Miller income statement for the year ended December 31, 2022

per chegg guidelines this is all one question. please show all your work

Answer 1

Dear student, we cannot able to post solution more than four sub-parts of the question as per our policy.

Lessee
Lease Amortization Schedule
Date	Annual Lease Payment	Interest on Liability @ 5%	Reduction of Lease Liability	Lease Liability
Jan 1, 2021				142,971
Jan 1, 2021	50,000	0	50,000	92,971
Dec 31, 2021	50,000	4,649	45,351	47,620
Dec 31, 2022	50,000	2,380	47,620	-

Interest on Liability = Beginning Lease Liability * 5%

Reduction of Lease Liability = Annual Lease Payment Plus BPO - Interest on Liability

Lease Liability = Beginning Lease Liability - Reduction of Lease Liability

	Income statement
	Interest expense	4,649
	Amortization expense (142971/3)	47,657
Answer 1	Amount related to its income statement	52,306

Answer 2	Lease liability at December 31, 2021	47,620
Answer 3	Right of use asset at December 31, 2021 (142971-47657)	95,314

Answer 4	This question is about the lease rather than Bonds. However, I want to provide the lease impact on cash flows statement
	Interest payment reported under operating activities	4,649
	Repayment of Lesae liabiliy [in principal] reported under financing activities (50000+45351)	95,351