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The following facts pertain to a non-cancelable lease agreement between Sheridan Leasing Company and Pharoah Company, a lessee. Commencement date Annual lease payment due at
The following facts pertain to a non-cancelable lease agreement between Sheridan Leasing Company and Pharoah Company, a lessee. Commencement date Annual lease payment due at the beginning of each year, beginning with January 1, 2025 Residual value of equipment at end of lease term, guaranteed by the lessee Expected residual value of equipment at end of lease term Lease term January 1, 2025 $104,272 $53,000 $48,000 6 years Economic life of leased equipment 6 years Fair value of asset at January 1, 2025 $554,000 Lessor's implicit rate 8 % Lessee's incremental borrowing rate 8 % 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. Prepare an amortization schedule that would be suitable for the lessee for the lease term. (Round present value factor calculations to 5 decimal places, eg. 1.25124 and the final answers to O decimal places eg. 5,275.) PHAROAH COMPANY (Lessee) Lease Amortization Schedule Interest on Datel Annual Lease Payment Plus GRV Liability 1/1/25 $ $ $ Reduction of Lease Liability Lease Liat $ 1/1/25 1/1/26 1/1/27 1/1/28 1/1/29 1/1/30 12/31/30
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