The following facts pertain to a non-cancelable lease agreement between Faldo Leasing Company andVaughnCompany, a lessee.

Commencement dateJanuary 1,Annual lease payment due at the beginning of

each year, beginning with January 1,$125,660Residual value of equipment at end of lease term,

guaranteed by the lessee$47,000Expected residual value of equipment at end of lease term$42,000Lease term6yearsEconomic life of leased equipment6yearsFair value of asset at January 1,$657,000Lessor's implicit rate8%Lessee's incremental borrowing rate8%

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.

(a)Create 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 answers to 0 decimal places e.g. 5,275.)

(b) Record all of the journal entries for the lessee for and to record the lease agreement, the lease payments, and all expenses related to this lease. Assume the lessee's annual accounting period ends on December 31.(Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Round answers to 0 decimal places e.g. 5,275. Record journal entries in the order presented in the problem.)

(c)SupposeVaughnreceived a lease incentive of $5,000from Faldo Leasing to enter the lease. How would the initial measurement of the lease liability and right-of-use asset be affected?

Right-of-use asset =

Lease Liability =

(d) What ifVaughnprepaid rent of $5,000to Faldo?

Right-of-use asset =

Lease Liability =