Problem 21A-1 a-c The following facts pertain to a non-cancelable lease agreement between Faldo Leasing Company and Waterway Company, a lessee Commencement date Annual lease payment due at the beginning of January 1, 2017 $137,171 $54,000 each year, beginning with January 1, 2017 Residual value of equipment at end of lease term, guaranteed by the lessee Expected residual value of equipment at end of lease term Lease term Economic life of leased equipment Fair value of asset at January 1, 2017 Lessor's implicit rate Lessee's incremental borrowing rate $49,000 6 years 6 years $659,000 12% 12% 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. er view the factor table