Question: problem 21a1 ac part level submission the following facts pertain...
Problem 21A-1 a-c (Part Level Submission)
The following facts pertain to a non-cancelable lease agreement between Faldo Leasing Company and Sweet Company, a lessee.
Commencement date January 1,
Annual lease payment due at the beginning of
each year, beginning with January 1, 2017 $104,738
Residual value of equipment at end of lease term,
guaranteed by the lessee $54,000
Expected residual value of equipment at end of lease term $49,000
Lease term 6 years
Economic life of leased equipment 6 years
Fair value of asset at January 1, 2017 $584,000
Lessor’s implicit rate 6 %
Lessee’s incremental borrowing rate 6 %
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.
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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.)