Inception date Annual lease payment due at the beginning of each year, beginning with January 1, 2017 Residual value of equipment at end of lease term, guaranteed by the lessee Lease term January 1, 2017 $124,798 $50,000 years 6 уеars $600,000 Economic life of leased equipment Fair value of asset at January 1, 2017 Lessor's implicit rate Lessee's incremental borrowing rate 12% 12%
(Lessee Entries with Residual Value) The following facts pertain to a noncancelable lease agreement between Faldo Leasing Company and Vance Company, a lessee.
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The lessee assumes responsibility for all executory costs, which are expected to amount to $5,000 per year. The asset will revert to the lessor at the end of the lease term. The lessee has guaranteed the lessor a residual value of $50,000. The lessee uses the
Instructions
(a) Prepare an amortization schedule that would be suitable for the lessee for the lease term.
(b) Prepare all of the
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