also prepare an amortization table

Pronghorn Corporation leased equipment to Larkspur, Inc. on January 1,2020. The lease agreement called for annual rental payments of $1.179 at the bezinning of each year of the 3-year lease. The equipment has an economic useful fife of 7 years, a fair value of $8,900, a book value of $6,900, and Pronghorn expects a residual value of $6,400 at the end of the lease term. Pronghorn set the lease payments with the intent of earning a 5% return, though Larkspur is unaware of the rate implicit in the fease and has an incremental borrowing rate of 7%. There is no bargain purchase option, ownership of the lease does not transfer at the end of the lease term, and the asset is not of a specialized nature. Click here to view factor tables. (For calculation purposes, use 5 decimal places as displayed in the foctor table provided). Date Account Titles and Explanation Debit Credit (To record the lease) (To record lease payment)