Maker Company , as lessee , enters into a lease agreement on Jan 1 , 2006 , for equipment . The annual lease payments which begin on Jan 1st , 2006 (includes executory costs)are $60 , 900 . 24 The following data are relevant to the lease agreement :

1 . The term of the non- cancelable lease is 5 years , with no renewal Option, and a guaranteed residual value of $20 , 000

2 . The fair value of the equipment on Jan 1 , 2006 is $250 , 000 . The equipment has an economic life of 6 years with no salvage value .

3 . Maker depreciates similar machinery it owns on the Straight Line basis .

4 . The lessee pays the lessor executory costs of $5,000 per year .

5. Maker's incremental borrowing rate is 9% per year . The lessee is aware that the lessor used an implicit rate of 9% in computing

the lease payments

6 . At the end of the lease , the FMV of the equipment is $20,000

Question:

(a) Calculate the amount of the lease payment and prepare a lease amortization table.