2....newThe following facts pertain to a non-cancelable lease agreement between Faldo Leasing Company and Crane Company, a lessee.Commencement date January 1, Annual lease payment due at the beginning of each year, beginning with January 1, $104,218 Residual value of equipment at end of lease term, guaranteed by the lessee $51,000 Expected residual value of equipment at end of lease term $46,000 Lease term 6yearsEconomic life of leased equipment 6yearsFair value of asset at January 1, $540,000 Lessor’s implicit rate 9%Lessee’s incremental borrowing rate 9%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 calculations to 5 decimal places, e.g. 1.25124 and the final answers to 0 decimal places e.g. 5,275.)CRANE COMPANY (Lessee)Lease Amortization ScheduleDate Annual LeasePayment Plus GRV Interest onLiability Reduction of LeaseLiability Lease Liability1/1/20 $enter a dollar amount rounded to 0 decimal places $enter a dollar amount rounded to 0 decimal places $enter a dollar amount rounded to 0 decimal places $enter a dollar amount rounded to 0 decimal places 1/1/20 enter a dollar amount rounded to 0 decimal places enter a dollar amount rounded to 0 decimal places enter a dollar amount rounded to 0 decimal places enter a dollar amount rounded to 0 decimal places1/1/21 enter a dollar amount rounded to 0 decimal places enter a dollar amount rounded to 0 decimal places enter a dollar amount rounded to 0 decimal places enter a dollar amount rounded to 0 decimal places1/1/22 enter a dollar amount rounded to 0 decimal places enter a dollar amount rounded to 0 decimal places enter a dollar amount rounded to 0 decimal places enter a dollar amount rounded to 0 decimal places1/1/23 enter a dollar amount rounded to 0 decimal places enter a dollar amount rounded to 0 decimal places enter a dollar amount rounded to 0 decimal places enter a dollar amount rounded to 0 decimal places1/1/24 enter a dollar amount rounded to 0 decimal places enter a dollar amount rounded to 0 decimal places enter a dollar amount rounded to 0 decimal places enter a dollar amount rounded to 0 decimal places1/1/25 enter a dollar amount rounded to 0 decimal places enter a dollar amount rounded to 0 decimal places enter a dollar amount rounded to 0 decimal places enter a dollar amount rounded to 0 decimal places12/31/26 enter a dollar amount rounded to 0 decimal places enter a dollar amount rounded to 0 decimal places enter a dollar amount rounded to 0 decimal places enter a dollar amount rounded to 0 decimal places $enter a total amount $enter a total amount $enter a total amount Save for Later Attempts: 0 of 1 usedSubmit Answer (b)The parts of this question must be completed in

Lease refers to a contract between two parties under which one party who is the real owner of an…

Answered: Prepare an amortization schedule that…

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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(a)

Prepare an amortization schedule that would be suitable for the lessee for the lease term. (Round present value factor calculations to 5 decimal places, e.g. 1.25124 and the final answers to 0 decimal places e.g. 5,275.)

CRANE COMPANY (Lessee) Lease Amortization Schedule
Date	Annual Lease Payment Plus GRV	Interest on Liability	Reduction of Lease Liability	Lease Liability
1/1/20	$enter a dollar amount rounded to 0 decimal places	$enter a dollar amount rounded to 0 decimal places	$enter a dollar amount rounded to 0 decimal places	$enter a dollar amount rounded to 0 decimal places
1/1/20	enter a dollar amount rounded to 0 decimal places	enter a dollar amount rounded to 0 decimal places	enter a dollar amount rounded to 0 decimal places	enter a dollar amount rounded to 0 decimal places
1/1/21	enter a dollar amount rounded to 0 decimal places	enter a dollar amount rounded to 0 decimal places	enter a dollar amount rounded to 0 decimal places	enter a dollar amount rounded to 0 decimal places
1/1/22	enter a dollar amount rounded to 0 decimal places	enter a dollar amount rounded to 0 decimal places	enter a dollar amount rounded to 0 decimal places	enter a dollar amount rounded to 0 decimal places
1/1/23	enter a dollar amount rounded to 0 decimal places	enter a dollar amount rounded to 0 decimal places	enter a dollar amount rounded to 0 decimal places	enter a dollar amount rounded to 0 decimal places
1/1/24	enter a dollar amount rounded to 0 decimal places	enter a dollar amount rounded to 0 decimal places	enter a dollar amount rounded to 0 decimal places	enter a dollar amount rounded to 0 decimal places
1/1/25	enter a dollar amount rounded to 0 decimal places	enter a dollar amount rounded to 0 decimal places	enter a dollar amount rounded to 0 decimal places	enter a dollar amount rounded to 0 decimal places
12/31/26	enter a dollar amount rounded to 0 decimal places	enter a dollar amount rounded to 0 decimal places	enter a dollar amount rounded to 0 decimal places	enter a dollar amount rounded to 0 decimal places
	$enter a total amount	$enter a total amount	$enter a total amount

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Commencement date	January 1,
Annual lease payment due at the beginning of each year, beginning with January 1,	$104,218
Residual value of equipment at end of lease term, guaranteed by the lessee	$51,000
Expected residual value of equipment at end of lease term	$46,000
Lease term	6	years
Economic life of leased equipment	6	years
Fair value of asset at January 1,	$540,000
Lessor’s implicit rate	9	%
Lessee’s incremental borrowing rate	9	%