= The following facts pertain to a non-cancelable lease agreement between Faldo Leasing Company and Kingbird Company, a lessee. Commencement date January 1, Annual lease payment due at the beginning of each year, beginning with January 1, $116,406 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, $642,000 Lessor's implicit rate 6 % Lessee's incremental borrowing rate 6 % 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. Click here to view factor tables. Lease Amortization Schedule Date Annual Lease Payment Plus GRY Interest on Liability Reduction of Lease Liability Lease Lia 1/1/20 $ $ $ $ 1/1/20 1/1/21 1/1/22 1/1/23 1/1/24 1/1/25 12/31/26 $