10:28 .ill 56% 499 P20.1 (LO 2, 4) (Lessee Entries, Finance Lease) The following facts pertain to a non-cancelable lease agreement between Faldo Leasing Company and Vance Company, a lessee. Commencement January date Annual lease payment due at the beginning of each year, beginning with January 1, 2025 1, 2025 $113,864 Residual value $50,000 of equipment at end of lease term, guaranteed by the lessee Expected residual value of equipment at end of lease term $45,000 10:28 guaranteed by the lessee Expected residual value of equipment at end of lease $45,000 term Lease term 6 years Economic life of 6 years leased equipment Fair value of $600,000 asset at January 1, 2025 Lessor's implicit 8% rate Lessee's 8% incremental ll 56% 490 borrowing rate 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. Instructions 10:28 .ill 56% 499 borrowing rate 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. Instructions a. Prepare an amortization schedule that would be suitable for the lessee for the lease term. b. Prepare all of the journal entries for the lessee for 2025 and 2026 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. c. Suppose Vance received a lease incentive of $5,000 from Faldo Leasing to enter the lease. How would the initial measurement of the lease liability and right-of-use asset be affected? What if Vance prepaid rent of $5,000 to Faldo? P20.2 (LO 2. 4) (Lessee Entries and