$($Lessee Entries; Finance Lease and Unguaranteed Residual Value$)$ Assume that on December $31,2024,$ Kimberly$-$Clark Corp. signs a $10-$year, non$-$cancelable lease agreement to lease a storage building from Sheffield Storage Company. The following information pertains to this lease agreement.

The agreement requires equal rental payments of $$71,830$ beginning on December $31,2024.$

The fair value of the building on December $31,2024,$ is $$525,176.$

The building has an estimated economic life of $12$ years, a guaranteed residual value of $$10,000,$ and an expected residual value of $$7,000.$ Kimberly$-$Clark depreciates similar buildings on the straightline method.

The lease is nonrenewable. At the termination of the lease, the building reverts to the lessor.

Kimberly$-$Clark$$s incremental borrowing rate is $8\%$ per year. The lessor$$s implicit rate is not known by Kimberly$-$Clark.

Instructions

Prepare the lease amortization schedule.