Refer to the following lease amortization schedule. The 10 payments are made annually starting with the beginning of the lease. Title does not transfer to the lessee and there is no purchase option or guaranteed residual value. The asset has an expected economic life of 12 years. The lease is noncancelable. Payment Cash Payment Effective Interest Decrease in balance Outstanding Balance 87,867 1 13,000 13,000 74,867 2 13,000 7487 5513 69,354 3 13,000 6935 6065 63,289 4 13,000 6329 6671 56,618 5 13,000 5662 7338 49,280 6 13,000 4928 8072 41,208 7 13,000 4121 8879 32,329 8 13,000 3233 9767 22,562 9 13,000 ? ? ? 10 13,000 ? ? ? What would be the outstanding balance after payment 10?

What would be the outstanding balance after payment 10?

Cash Payment

Effective Interest

Decrease in balance

Outstanding Balance

87,867

1

13,000

13,000

74,867

2

13,000

7487

5513

69,354

3

13,000

6935

6065

63,289

4

13,000

6329

6671

56,618

5

13,000

5662

7338

49,280

6

13,000

4928

8072

41,208

7

13,000

4121

8879

32,329

8

13,000

3233

9767

22,562

9

13,000

?

?

?

10

13,000

?

?

?

$1182.

$13,000.

$11,818.

$0.