Bridgeport Corporation entered into a lease agreement on January 1, 2020, to provide Ivanhoe Company with a piece of machinery. The terms of the lease agreement were as follows. 1. 2. 3. The lease is to be for 3 years with rental payments of $13,319 to be made at the beginning of each year. The machinery has a fair value of $64,000, a book value of $40,000, and an economic life of 8 years. 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. The lease does not transfer ownership at the end of the lease term, does not have a bargain purchase option, and the asset is not of a specialized nature. The implicit rate is 6%, which is known by Ivanhoe. Collectibility of the payments is probable. 4. 5. 6. Prepare the amortization schedules Ivanhoe will use over the lease term. IVANHOE COMPANY Lease Amortization Schedule Annuity-Due Basis Interest Reduction of on Liability Lease Liability Annual Payment Lease Liability $ $ $ $ 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 $ $ $