Response to the following problem:
North Corp. entered into a finance lease agreement with South Leasing Ltd. on April 1, 2016. North Corp. agreed to pay South an initial payment of $20,000 on that date and annual payments of $33,308 for the next three years commencing on March 31, 2017, to lease a piece of equipment with a fair value of $100,000. The interest rate implicit in the lease agreement was 12%.
Required:
1. Prepare the journal entries to record April 1, 2016 transactions.
2. Prepare the lease repayment schedule.
3. Prepare the partial balance sheet of North Corp. at December 31, 2018 showing the finance lease balance assuming the December 31 lease payment has been made.