Ayayai Inc. manufactures an X-ray machine with an estimated life of 12 years and leases it to Pina Medical Center for a period of 10 years. The normal selling price of the machine is $505,837, and its guaranteed residual value at the end of the non-cancelable lease term is estimated to be $15,700. The hospital will pay rents of $61,200 at the beginning of each year. Ayayai incurred costs of $255,000 in manufacturing the machine and $14,500 in legal fees directly related to the signing of the lease. Ayayai has determined that the collectibility of the lease payments is probable and that the implicit interest rate is 5%. Pina Medical Center has an incremental borrowing rate of 5% and an expected residual value at the end of the lease of $10,000. PINA MEDICAL (Lessee) Lease Amortization Schedule (Annuity Due Basis, GRV) Interest on Unpaid Liability Annual Lease Payment Plus GRV Reduction of Lease Liability Lease Liability i $ i $ i $ 49969: 61200 0 61200 438491 61200 21925 39275 39922 61200 19961 41239 35798 61200 17899 43301 31468: 61200 15734 27567 28711 61200 14356 13211 27390 61200 13695 61200 61200 61200 $ $ $