Help Save & Exit TB MC Qu. 15-118 (Static) On December 31, 2020, Reagan Inc. signed... On December 31, 2020, Reagan Inc. signed a lease with Silver Leasing Co. for some equipment having a seven-year useful life. The lease payments are made by Reagan annually, beginning at signing date. Title does not transfer to the lessee, so the equipment will be returned to the lessor on December 31, 2026. There is no purchase option, and Reagan guarantees a residual value to the lessor on termination of the lease. Reagan's lease amortization schedule appears below: Decrease in Outstanding Dec. 31 Payments Interest Balance Balance 2020 $519,115 2020 $90,000 $90,000 429,115 2021 $90,000 $17,165 72,835 356,280 2022 $90,000 14,251 75,749 280,531 2023 $90,000 11,221 78,779 201,752 2024 $90,000 8,070 81,930 119,822 2025 $90,000 4,793 85,207 34,615 2026 $36,000 1,385 34,615 In this situation, Reagan: