Laura Leasing Company signs an agreement on January 1, 2020, to lease equipment to Larkspur 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 $66,000. 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 $5,000, none of which is guaranteed. 4. The agreement requires equal annual rental payments of $21,328 to the lessor, beginning on January 1, 2020. 5. The lessee's incremental borrowing rate is 5%. The lessor's implicit rate is 4% and is unknown to the lessee. 6. Larkspur 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.) LARKSPUR COMPANY (Lessee) Lease Amortization Schedule Annual Lease Payment Interest on Liability Reduction of Lease Liability Date Lease Liability 1/1/20 $ $ $ $ 60986 1/1/20 21328 0 21328 39658 1/1/21 21328 1983 19345 20313 1/1/22 21328 1015 20313 0 $ 63984 $ 2998 $ 60986