Laura Leasing Company signs an agreement on January 1, 2020, to lease equipment to Tamarisk Company. The following information relates to this agreement.

1.The term of the non-cancelable lease is 3 years with no renewal option. The equipment has an estimated economic life of 5 years.2.The fair value of the asset at January 1, 2020, is $74,000.3.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 $3,000, none of which is guaranteed.4.The agreement requires equal annual rental payments of $24,716 to the lessor, beginning on January 1, 2020.5.The lessees incremental borrowing rate is 5%. The lessors implicit rate is 4% and is unknown to the lessee.6.Tamarisk uses the straight-line depreciation method for all equipment.

Click here to view factor tables. (For calculation purposes, use 5 decimal places as displayed in the factor table provided.)

(a)

Prepare an amortization schedule that would be suitable for the lessee for the lease term. (Round answers to 0 decimal places, e.g. 5,265.)

TAMARISK COMPANY (Lessee) Lease Amortization Schedule

Date

Annual Lease Payment

Interest on Liability

Reduction of Lease Liability

Lease Liability

1/1/20

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1/1/20

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1/1/21

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1/1/22

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