The following facts pertain to a noncancelable lease agreement between Faldo Leasing Company and Vance Company, a lessee.

Inception date		January 1, 2014
Annual lease payment due at the beginning of each year, beginning with January 1, 2014		$130,988
Residual value of equipment at end of lease term, guaranteed by the lessee		$77,000
Lease term		6	years
Economic life of leased equipment		6	years
Fair value of asset at January 1, 2014		$671,000
Lessors implicit rate		10	%
Lessees incremental borrowing rate		10	%

The lessee assumes responsibility for all executory costs, which are expected to amount to $5,040 per year. The asset will revert to the lessor at the end of the lease term. The lessee has guaranteed the lessor a residual value of $77,000. The lessee uses the straight-line depreciation method for all equipment.

(a)

Prepare an amortization schedule that would be suitable for the lessee for the lease term. (Round present value factor calculations to 5 decimal places, e.g. 1.25124 and the final answer to 0 decimal places e.g. 58,971.)

VANCE COMPANY (Lessee) Lease Amortization Schedule
Date		Annual Lease Payment Plus GRV		Interest on Liability		Reduction of Lease Liability		Lease Liability
1/1/14								$
1/1/14		$		$		$
1/1/15
1/1/16
1/1/17
1/1/18
1/1/19
12/31/19
		$		$		$