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Problem 21-01 The following facts pertain to a non-cancelable lease agreement between Faldo Leasing Company and...

Problem 21-01

The following facts pertain to a non-cancelable lease agreement between Faldo Leasing Company and Splish Company, a lessee.
Commencement date January 1,
Annual lease payment due at the beginning of
   each year, beginning with January 1,
$99,118
Residual value of equipment at end of lease term,
   guaranteed by the lessee
$53,000
Expected residual value of equipment at end of lease term $48,000
Lease term 6 years
Economic life of leased equipment 6 years
Fair value of asset at January 1, $554,000
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.

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 0 decimal places e.g. 5,275.)

SPLISH 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

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