P2]Al.{Lessee Entries, Finance Lease)(L0 2, 4) The following facts pertain to a noncancelable lease agreement between Faldo Leasing Company and Vance Company, a lessee. Commencement date January I, 20]? Annual lease payment due at the beginning of each year, beginning with January I, 201'? $113,364 Residual value of equipment at end of lease term, guaranteed by the lessee $50,000 Expected residual value of equipment at end of lease term $45,000 Lease term 6 years Economic life of leased equipment 6 years Fair value of asset at January I, 201'? $600,000 Lessor's implicit rate 8% Lessee's incremental borrowing rate 8% The asset will revert to the lessor at the end of the lease term. The lessee uses the straightline amortization for all leased equipment. Instructions (a)Prepare an amortization schedule that would be suitable for the lessee for the lease term. (b)Prepare all of the journal entries fer the lessee for 2017 and 2018 to record the lease agreement, the lease payments, and all expenses related to this lease. Assume the lessee's annual accounting period ends on December 31