Ayayai Corporation entered into a lease agreement on January 1, 2020, to provide Blossom Company with a piece of machinery. The terms of the lease agreement were as follows. 1. The lease is to be for 3 years with rental payments of $12,992 to be made at the beginning of each year. 2. The machinery has a fair value of $62,000, a book value of $40,000, and an economic life of 8 years. 3. At the end of the lease term, both parties expect the machinery to have a residual value of $30,000, none of which is guaranteed. end the lease term, es not hai a bargain purchase option, and asset 4. The lease does not transfer ownership at not of a specialized nature. a 5. The implicit rate is 5%, which is known by Blossom. 6. Collectibility of the payments is probable. BLOSSOM COMPANY Lease Amortization Schedule Annuity-Due Basis Interest on Liability Reduction of Lease Liability Annual Payment Lease Liability $ 37150 12992 12992 24158 12992 1208 11784 12374 12992 618 12374 0 Lease Expense Schedule (A) Straight-Line Expense (B) Interest on Lease Liability (C) Amortization of Right-of-Use Asset (and Liability) (A-B) Carrying Value of Right-of-Use Asset 37150 12992 1208 ta 11784 25366 12992 618 12374 12992 12992 0 12992 0