1. 2 Laura Leasing Company signs an agreement on January 1, 2020, to lease equipment to Windsor Company. The following information relates to this agreement. The term of the non-cancelable lease is 3 years with no renewal option. The equipment has an estimated economic life of years. The fair value of the asset at January 1, 2020, is $55,000. The asset will revert to the lessor at the end of the lease term, at which time the asset is expected to have a residual value of $5,000, none of which is guaranteed. The agreement requires equal annual rental payments of $17.517 to the lessor, beginning on January 1, 2020. 5. The lessee's incremental borrowing rate is 5%. The lessor's implicit rate is 4% and is unknown to the lessee. Windsor uses the straight-line depreciation method for all equipment 3. 4. 6. Click here to view factor tables. (For calculation purposes, use 5 decimal places as displayed in the factor table provided.) (a) Your answer is correct. Prepare an amortization schedule that would be suitable for the lessee for the lease term. (Round answers to decimal places, eg. 5,265.) WINDSOR COMPANY (Lessee) Lease Amortization Schedule Annual Lease Payment Interest on Liability Reduction of Lease Liability Lease Liability $ S $ 50088 17517 17517 32571 17517 1629 15888 16683 17517 834 16683 (0) S 52551 S 2463 S 50088 Prepare all of the journal entries for the lessee for 2020 and 2021 to record the lease agreement, the lease payments, and all expenses related to this lease. Assume the lessee's annual accounting period ends on December 31. (Credit account titles are automatically indented when amount is entered. Do not indent manually. Round answers to decimal places, eg. 5,265. Record journal entries in the order presented in the problem.) Date Account Titles and Explanation Debit Cred (To record the lease) (To reverse interest expense) (To record lease payment) 11 (To record interest expense)