Problem 21A-1 a-c (Part Level Submission) The following facts pertain to a non-cancelable lease agreement between Faldo Leasing Company and Sweet Company, a lessee. Commencement date January 1, 2017 Annual lease payment due at the beginning of each year, beginning with January 1, 2017 $104,738 Residual value of equipment at end of lease term, guaranteed by the lessee $54,000 Expected residual value of equipment at end of lease term $49,000 Lease term 6 years Economic life of leased equipment 6 years Fair value of asset at January 1, 2017 $584,000 Lessor's implicit rate 6 % Lessee's incremental borrowing rate 6 % The asset will revert to the lessor at the end of the lease term. The lessee uses the straight-line amortization for all leased equipment. Click here to view the factor table. (c) x Your answer incorrect. Try again. Suppose Sweet received a lease incentive of $5,000 from Faldo Leasing to enter the lease. How would the initial measurement of the lease liability and right-of-use asset be affected? Right-of-use asset 554,458 What if Sweet prepaid rent of $5,000 to Faldo? Right-of-use asset 544,458 Click if you would like to Show Work for this question: Open Show Work