Far right column is Lease Liability

Laura Leasing Company signs an agreement on January 1, 2020, to lease equipment to Windsor Company. The following information relates to this agreement. on 1 yr al 2 3. The term of the non-cancelable lease is 3 years with no renewal option. The equipment has an estimated economic life of 5 years. The fair value of the asset at January 1, 2020, is $78,000. The asset will revert to the lessor at the end of the lease term, at which time the asset is expected to have a residual value of $6,000, none of which is guaranteed. The agreement requires equal annual rental payments of $25,178 to the lessor, beginning on January 1, 2020. The lessee's incremental borrowing rate is 5%. The lessor's implicit rate is 4% and is unknown to the lessee. Windsor uses the straight-line depreciation method for all equipment. 4. 5. 6. WINDSOR COMPANY (Lessee) Lease Amortization Schedule Interest on Reduction of Lease Liability Liability Date Annual Lease Payment Lease 1/1/20 $ $ I 1/1/20 1/1/21 1/1/22 $ $ S