The following facts pertain to a non-cancelable lease agreement between Faldo Leasing Company and Monty Company, a lessee. Commencement date Annual lease payment due at the beginning of each year, beginning with January 1, Residual value of equipment at end of lease term. guaranteed by the lessee Expected residual value of equipment at end of lease term Lease term Economic life of leased equipment Fair value of asset at January 1, Lessor's implicit rate Lessee's incremental borrowing rate January 1, (a) $104,218 $51,000 $46,000 6 years 6 years $540,000 9% 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. 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 O decimal places eg. 5,275)
The following facts pertain to a non-cancelable lease agreement between Faldo Leasing Company and Monty Company, a lessee. Commencement date Annual lease payment due at the beginning of each year, beginning with January 1, Residual value of equipment at end of lease term. guaranteed by the lessee Expected residual value of equipment at end of lease term Lease term Economic life of leased equipment Fair value of asset at January 1, Lessor's implicit rate Lessee's incremental borrowing rate January 1, (a) $104,218 $51,000 $46,000 6 years 6 years $540,000 9% 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. 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 O decimal places eg. 5,275)
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
Subject: acounting
Transcribed Image Text:(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 O decimal places eg. 5,275.)
Date
1/1/20
1/1/20
1/1/21
1/1/22
1/1/23
1/1/24
1/1/25
12/31/26
$
Annual Lease
Payment Plus GRV
$
$
MONTY COMPANY (Lessee)
Lease Amortization Schedule
Interest on
Liability
$
Reduction of Lease
Liability
Lease Liab
Transcribed Image Text:The following facts pertain to a non-cancelable lease agreement between Faldo Leasing Company and Monty Company, a lessee.
Commencement date.
Annual lease payment due at the beginning of
each year, beginning with January 1,
Residual value of equipment at end of lease term.
guaranteed by the lessee
Expected residual value of equipment at end of lease term
Lease termi
Economic life of leased equipment
Fair value of asset at January 1,
Lessor's implicit rate
Lessee's incremental borrowing rate
January 1,
(a)
$104,218
$51,000
$46,000
6 years
6 years
$540,000
9 %
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.
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 O decimal places e.g. 5,275.)
MONTY COMPANY (Lessen)
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