The following facts pertain to a non-cancelable lease agreement between Cullumber Leasing Company and Crane Company, a lessee.Commencement dateAnnual lease payment due at the beginning ofeach year, beginning with January 1, 2025Residual value of equipment at end of lease term,guaranteed by the lesseeJanuary 1, 2025$125,377$54,000Expected residual value of equipment at end of lease term$49,000Lease term6 yearsEconomic life of leased equipment6 yearsFair value of asset at January 1, 2025$660,000Lessor's implicit rate8 %Lessee's incremental borrowing rate8 %The asset will revert to the lessor at the end of the lease term. The lessee uses the straight-line amortization for all leased equipment.Click here to view factor tables.(a)Prepare an amortization schedule that would be suitable for the lessee for the lease term. (Round present value factor calculationsto 5 decimal places, e.g. 1.25124 and the final answers to O decimal places e.g. 5,275.)Date1/1/25$1/1/251/1/261/1/271/1/281/1/291/1/3012/31/30CRANE COMPANY (Lessee)Lease Amortization ScheduleAnnual LeasePayment Plus GRVInterest onLiabilityReduction of LeaseLiabilityLease Li$$$

Lease:The written contract where one person who owns the assets or property allows the other party…

nual lease payment due at the beginning of each year, beginning with January 1, 2025 $125,377 esidual value of equipment at end of lease term, guaranteed by the lessee $54,000 pected residual value of equipment at end of lease term $49,000 ase term 6 years conomic life of leased equipment 6 years ir value of asset at January 1, 2025 $660,000 ssor's implicit rate ssee's incremental borrowing rate 8 % 8 %

nual lease payment due at the beginning of each year, beginning with January 1, 2025 $125,377 esidual value of equipment at end of lease term, guaranteed by the lessee $54,000 pected residual value of equipment at end of lease term $49,000 ase term 6 years conomic life of leased equipment 6 years ir value of asset at January 1, 2025 $660,000 ssor's implicit rate ssee's incremental borrowing rate 8 % 8 %

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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