(Lessee Entries with residual value) The following facts pertain to a noncancelable lease agreement between Faldo Leasing Company and Vance company, a lessee.

Inception Date January 1, 2014

Annual lease payment due at beginning of each year, beginning Jan. 1, 2014 $124,798

Residual value of equipment at end of lease term, guaranteed by the lessee $50,000

Lease Term 6 years

Economic life of leased equipment 6 years

Fair value of asset, Jan. 1, 2014 $600,000

Lessor's Implicit Rate 12%

Lessee's incremental borrowing rate 12%

The lessee assumes responsibility for all executory costs, which are expected to amount to $5,000 per year. The asset will revert to lessor

at the end of the lease term. The lessee has guaranteed the lessor a residual value of $50,000. The lessee uses straight-line depreciation for all equipment.

A)Prepare an amortization schedule that would be suitable for the lessee for the lease term.

B)Prepare all journal entries for lessee for 2014 and 2015 to record the lease agreement, the lease payments, and all related expenses

related to the lease. Assume lessee's annual accounting period ends on December 31 and reversing entries are used when appropriate.