The following facts pertain to a non-cancelable lease agreement between Alschuler Leasing Company and Blossom Electronics, a lessee, for a computer system. Commencement date Lease term Economic life of leased equipment October 1, 2025 6 years 6 years Fair value of asset at October 1, 2025 $319,321 Book value of asset at October 1, 2025 $280,000 Residual value at end of lease term -0- Lessor's implicit rate 11 % Lessee's incremental borrowing rate 11 % Annual lease payment due at the beginning of each year, beginning with October 1, 2025 $68,000 Date 10/01/25 Lease Payment/Receipt The collectibility of the lease payments is probable by the lessor. The asset will revert to the lessor at the end of the lease term. The straight-line depreciation method is used for all equipment. The following amortization schedule has been prepared correctly for use by both the lessor and the lessee in accounting for this lease. The lease is to be accounted for properly as a finance lease by the lessee and as a sales-type lease by the lessor. Interest (11%) on Unpaid Liability/Receivable Reduction of Lease Liability/Receivable Balance of Lease Liability/Receivable $319,321 10/01/25 $68,000 $68,000 251.321 10/01/26 68,000 $27,645 40,355 210,966 10/01/27 68,000 23,206 44,794 166,172 10/01/28 68,000 18.279 49,721 116,451 10/01/29 68,000 12,810 55,190 61,261 10/01/30 68,000 6,739 61,261 -0- $408,000 $88,679 $319,321