Problem 21A-1 a-c

The following facts pertain to a non-cancelable lease agreement between Faldo Leasing Company and Windsor Company, a lessee.

Commencement date		January 1, 2017
Annual lease payment due at the beginning of each year, beginning with January 1, 2017		$119,345
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 1, 2017		$642,000
Lessors implicit rate		7	%
Lessees incremental borrowing rate		7	%

.he asset will revert to the lessor at the end of the lease term. The lessee uses the straight-line amortization for all leased equipment.

WINDSOR COMPANY (Lessee)
Lease Amortization Schedule
Date		Annual Lease		Interest on		Reduction of Lease		Lease Liability
		Payment Plus GRV		Liability		Liability

1/1/2017

1/1/2017

1/1/2018

1/1/2019

1/1/2020

1/1/2021

1/1/2022

12/31/2022