Pronghorn Corporation entered into a lease agreement on January 1, 2020, to provide Crane Company with a piece of machinery. The terms of the lease agreement were as follows. 1. The lease is to be for 3 years with rental payments of $13,319 to be made at the beginning of each year. 2. The machinery has a fair value of $64,000, a book value of $40,000, and an economic life of 8 years. 3. At the end of the lease term, both parties expect the machinery to have a residual value of $30,000, none of which is guaranteed. 4. The lease does not transfer ownership at the end of the lease term, does not have a bargain purchase option, and the asset is not of a specialized nature. 5. The implicit rate is 4%, which is known by Crane. 6. Collectibility of the payments is probable.

Prepare the amortization schedules Crane will use over the lease term.

CRANE COMPANY Lease Amortization Schedule Annuity-Due Basis
Date		Annual Payment		Interest on Liability		Reduction of Lease Liability		Lease Liability
1/1/20								$
1/1/20		$		$		$
1/1/21
1/1/22

Lease Expense Schedule

Date

(A) Straight-Line Expense

(B) Interest on Lease Liability

(C) Amortization of Right-of-Use Asset (and Liability) (A-B)

Carrying Value of Right-of-Use Asset

1/1/20

$

12/31/20

$

$

$

12/31/21

12/31/22