Concord Corporation entered into a lease agreement on January 1, 2020, to provide Sheridan 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 $13,089 to be made at the beginning of each year.
2.		The machinery has a fair value of $60,000, 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 $25,000, none of which is guaranteed.
4.		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.
5.		The implicit rate is 5%, which is known by Dawkins.
6.		Collectibility of the payments is probable.

Lease Expense Schedule

Date

(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

1/1/20

$

12/31/20

$

$

$

12/31/21

12/31/22

Please create a lease expense schedule and explain in detail why A = 13089 instead of 37427/3 = 12476