A lease agreement calls for quarterly lease payments of $7,228 over a 10-year lease term, with the first payment at July 1, the lease's inception. The interest rate is 10%. Both the fair value and the cost of the asset to the lessor are $180,000.
(a) What would be the amount of interest expense the lessee would record in conjunction with the second quarterly payment at October 1? (Round your answer to the nearest dollar amount.
(b) What would be the amount of interest revenue the lessor would record in conjunction with the second quarterly payment at October 1? (Round your answer to the nearest dollar amount.