Schedule of Lease Payments Stagg Construction Co. is leasing equipment from Cloud Inc. The lease calls for payments of $50,000 a year plus $3,000 a year executory costs for five years. The first payment is due on January 1, 2013, when the lease is signed, with the other four payments coming due on December 31 of each year. Stagg has also been given the option of purchasing the equipment at the end of the lease at a bargain price of $95,000. Stagg has an incremental borrowing rate of 9%, the same as the implicit interest rate of Cloud.

Stagg has hired you as an accountant and asks you to prepare a schedule showing how the lease payments will be split between principal and interest and the outstanding lease liability balance over the life of the lease. Round to the nearest dollar. Correct for the accumulated rounding error by adjusting the final lease payment interest amount. Stagg Construction Co. Schedule of Lease Payments (5-year lease with bargain purchase option) Lease Payme Lease Paymen Lease Paymen Executory Costs Lease Pay Principal Obligat 1/01/13 Initial Balance 1/01/13 Payment 12/31/13 Payment 12/31/14 Payment 12/31/15 Payment 12/31/16 Payment 12/31/17 Payment